What is the the 'Rule of 72'?

The "Rule of 72" is a simplified way to determine how long an investment will take to double, given a fixed annual rate of interest.

By dividing 72 by the annual rate of return, investors can get an estimation of how many years it will take for an initial investment to duplicate itself.

The Rule of 72 is just an estimation, not an exact solution

The Rule of 72 can be used to find the time period, given the interest rate,

or the Interest, given the time period.

the basic formula is:

R x t = 72

where:

R = interest rate per period as a percentage

t = number of periods