# Why 0.35 is added in rule of 69?

By Nick

### Quick Peek:

Want to know how long it takes for your investment to double in value? Use the rule of 69, a mathematical formula that calculates the number of years it takes for an investment to double. But to get a more accurate result, add 0.35 to the outcome to account for compounding interest. As an investor, it’s crucial to understand this formula to make informed decisions about your investments. So, whether you’re investing in a bank FD or stocks, use the rule of 69 to determine your investment’s growth potential.

## To Get a More Precise Outcome, We Should Add 0.35 to the Result

Have you ever heard of the rule of 69? It’s a mathematical formula used to calculate the number of years it takes for an investment to double in value. The formula is simple: divide 69 by the interest rate, and the result is the number of years it takes for the investment to double. But have you ever wondered why we add 0.35 to the result? In this article, we will explore the reason behind this addition and how it affects the outcome of our calculations.

### The Rule of 69

Before we dive into the reason behind the addition of 0.35, let’s first review the rule of 69. This formula is commonly used in finance to estimate the time it takes for an investment to double in value. For example, if you invest in a bank FD (fixed deposit) that offers a rate of return of 5%, the amount will double in approximately ((69 / 5) or 13.8 years. However, this calculation is not entirely accurate, and the actual time it takes for the investment to double may be slightly different.

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### The Reason Behind Adding 0.35

The reason why we add 0.35 to the result of the rule of 69 is to get a more precise outcome. This addition takes into account the effect of compounding interest, which is the interest earned on the interest of the investment. Compounding interest can significantly affect the outcome of an investment, and adding 0.35 to the result helps to account for this effect.

### An Example

Let’s take the same example we used earlier, where a person wants to invest in a bank FD that offers a rate of return of 5%. Using the rule of 69, the amount will double in approximately ((69 / 5) or 13.8 years. However, if we add 0.35 to the result, the new calculation will be ((69 / 5) + 0.35 or 14.15 years. This may seem like a small difference, but it can have a significant impact on the outcome of the investment.

### Conclusion

In conclusion, adding 0.35 to the result of the rule of 69 helps to get a more precise outcome when calculating the time it takes for an investment to double in value. This addition takes into account the effect of compounding interest, which can significantly affect the outcome of an investment. As an investor, it’s essential to understand the formula and how it works to make informed decisions about your investments.

References for « Why 0.35 is added in rule of 69? »

# References

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