Do you want to know how long it will take to double your money with a simple calculation ? A Quick and Easy Way to Calculate Compound Interest is The **Rule of 72**

**The Rule of 72**

The rule of 72 says that in order to find the number of years required to double your money at a given interest rate, you can just **divide the interest rate into 72**.For example, if you want to know how long it will take to double your money at eight percent interest, divide 8 into 72 and get **9 years**.

The rule of **72 is remarkably accurate**, as long as the interest rate is **less than 20%**.

You can also run it backwards. If you want to double your money in six years, just divide 6 into 72 to find that it will require an interest rate of about 12 percent.

**Practical Examples of the Rule of 72 in Action**

**Q**: Investor needs to double his money in seven years to reach his financial goals. What rate of return must he earn to do this successfully?

**Sol**: 72 divided by 7; the answer, 10.2857%, is the amount a person need to earn on an after-tax basis to successful reach his goal.

**Q**: Investor is earning a 9% on the investments. How long will it take to double the money?

**Sol**: To calculate the number of years necessary to double the money using the Rule of 72, divide 72 by 9; the answer, 8, is the number of years it will take to double.