The Rule of 72 Double Your Money

The rule of 72 is a simple way to estimate how long it takes for your money to double when you're earning interest on it. Here's how it works:

Imagine you have some money that you've saved, and you put it in a bank account that pays you interest. The rule of 72 helps you figure out approximately how many years it will take for that money to double.

So, to use the rule of 72, you divide the number 72 by the interest rate you're getting on your money. Let's say the interest rate is 6%.

If you divide 72 by 6, you get 12. That means it would take around 12 years for your money to double at an interest rate of 6%.

Let's say you start with $100 in your bank account. After 12 years, with an interest rate of 6%, your money would grow to around $200.

Now, if you had a higher interest rate, like 12%, you would divide 72 by 12, which equals 6. That means it would take around 6 years for your money to double at an interest rate of 12%.

The rule of 72 gives you a rough estimate and helps you understand how long it might take for your money to grow when you're earning interest. Remember, it's just an estimate and doesn't work perfectly for all situations, but it's a useful rule of thumb to get an idea of how your money can grow over time.