Rule of 72

The Rule of 72 is a simple way to estimate how long it will take to double your money at a given interest rate. It's not an exact science, but it can be a helpful tool for making financial decisions.

To use the Rule of 72, divide 72 by the interest rate. The resulting number is the number of years it will take to double your money. For example, if you're earning 6% interest, it will take you about 12 years to double your money.

The Rule of 72 is based on the idea of compound interest. Compound interest is when you earn interest on the interest you've already earned. This means that your money grows faster over time.

The Rule of 72 is a good rule of thumb, but it's important to remember that it's just an estimate. There are a number of factors that can affect the actual growth of your money, such as inflation and taxes.

If you're looking for a more accurate way to estimate how long it will take to double your money, you can use a financial calculator or consult with a financial advisor.

Here are some additional tips for using the Rule of 72:

* The Rule of 72 is most accurate for long-term investments. If you're only investing for a short period of time, the actual growth of your money may be different than what the Rule of 72 predicts.
* The Rule of 72 assumes that you're earning a fixed interest rate. If the interest rate changes over time, the actual growth of your money will be different than what the Rule of 72 predicts.
* The Rule of 72 doesn't take into account inflation. Inflation is the decrease in the value of money over time. This means that your money will buy less in the future than it does today.

The Rule of 72 is a simple but powerful tool that can help you make better financial decisions. By understanding how the Rule of 72 works, you can use it to plan for your financial future and reach your goals.