Quick Peek:
Want to know how long it will take for your money to double? Try the Rule of 72! Divide 72 by your expected annual return to find out how many years it will take. For example, if your expected return is 10%, it will take 7.2 years to double your investment. This simple formula is a helpful tool for making informed investment decisions and ensuring your money is working for you.
What is the Rule of 72 Money?
Have you ever wondered how long it would take for your money to double? The Rule of 72 Money is a simple formula that can help you determine just that. This rule is a quick and easy way to estimate the time it will take for your money to double based on your average expected annual return.
How to Use the Rule of 72 Money
The formula is simple: Divide 72 by your average expected annual return. The answer you get is how many years it should take for your money to double. For example, if your average expected annual return is 10%, then it would take you 7.2 years to double your money.
Let’s say you have $10,000 invested in a stock market index fund that averages an annual return of 8%. Using the Rule of 72 Money, you can estimate that your money will double in approximately 9 years. This means that in 9 years, your $10,000 investment will be worth $20,000.
Why Use the Rule of 72 Money?
The Rule of 72 Money is a useful tool for investors who want to estimate how long it will take for their money to grow. It is a quick and easy way to calculate the time it will take for your investments to double, and it can help you make informed decisions about your investments.
By using the Rule of 72 Money, you can determine whether an investment is worth your time and money. If an investment has a low expected annual return, it may not be worth your time and money to invest in it. On the other hand, if an investment has a high expected annual return, it may be worth your time and money to invest in it.
Conclusion
In conclusion, the Rule of 72 Money is a simple formula that can help you estimate how long it will take for your money to double. By dividing 72 by your average expected annual return, you can determine the number of years it will take for your investments to double. This formula is a useful tool for investors who want to make informed decisions about their investments and ensure that their money is working for them.
References for « What is the Rule of 7 Money? »
- Investopedia – Rule of 72
- The Balance – Understanding the Rule of 72
- The Motley Fool – What is the Rule of 7?
- NerdWallet – What Is the Rule of 7 in Investing?
- The Balance – How to Double Your Money Using the Rule of 72
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