This means to use the rule of 72 all you do is divide 72 by the fixed rate of return to get the number of years it will take for your initial investment to double. For example, if your investment ...

The rule of 72 suggests that your mutual fund investment would double to $100,000 in 12 years. The key assumption of the rule—that the rate of return remains stable for years—means that it ...

The Rule of 72 can also help you see how long it would take for the effect of inflation to cut your money in half. As an example, say you have $100,000 and expect a hypothetical long-term ...

Remember though, the Rule of 72 is designed to be a rough estimate and its assumptions aren't always realistic. It assumes a constant rate of return, and stock returns are anything but constant.

The Rule of 72 also has limitations. Like the Rule of 70, it assumes a constant rate of return. Additionally, it is most accurate for interest rates between 6% and 10%.

How And When To Use The Rule Of 72 Say you've invested $1,000 in a stock that's expected to return 10% annually. How long will it take for your money to reach $2,000? Divide the investment by its ...

The Rule of 72 is a general mathematical guideline, in financial planning, that determines how long an investment portfolio will take to double. The Rule assumes a fixed rate of return (ROR), and ...

Using the rule of 72, dividing 72 by 5 results in 14.4. This means it should take nearly 14 and a half years for the investment to double in value. Of course, this is just an estimate and not exact.

The rule of 72 is “one of the simplest yet most powerful concepts in investment mathematics,” says Brian McGraw, a senior wealth advisor at Hightower Wealth Advisors St. Louis.

Accuracy: The Rule of 72 is generally more accurate than the Rule of 70 for growth rates that are multiples of three, such as 6% or 9%. This is because 72 is divisible by more numbers, allowing ...

Based on the above, you would need to earn 10% per year to double your money in a little over seven years. The rule of 72 is “one of the simplest yet most powerful concepts in investment ...