Rule of 72 : Divide 72 by [...] to get the approximate number of years it would take to double an investment
Answer
the stated interest rate
(double it at the interest rate.)
Tags
#tvm
Question
Rule of 72 : Divide 72 by [...] to get the approximate number of years it would take to double an investment
Answer
?
Tags
#tvm
Question
Rule of 72 : Divide 72 by [...] to get the approximate number of years it would take to double an investment
Answer
the stated interest rate
(double it at the interest rate.)
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Rule of 72 To quickly approximate the number of periods, practitioners sometimes use an ad hoc rule called the Rule of 72 : Divide 72 by the stated interest rate to get the approximate number of years it would take to double an investment at the interest rate. Here, the approximation gives 72/7 = 10.3 years. The Rule of 72 is loosely based on the observation that it takes 12 years to double an amount at a 6 percent interest rate, giving 6 × 1
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