6 lines · 101 words · 0:33 read aloud
The Rule of 72
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There's a simple trick to see how fast money doubles. Divide 72 by the interest rate.
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At 6 percent a year, 72 divided by 6 is 12. So money growing at 6 percent doubles in about 12 years.
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It works on debt too. A balance charging 24 percent, left unpaid, doubles in about three years.
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And on inflation. At 3 percent, prices double in about 24 years.
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It's an estimate, not an exact formula, and it works best for rates between about 4 and 12 percent.
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But it's a quick way to see what time does to money, in either direction.
