Investor Glossary-72 ruleInvestor Glossary-72 ruleInvestor Glossary-72 ruleInvestor Glossary-72 ruleInsightful stock market charts - Click here
investor
Categories    # A B C D E F G H I J K L M N O P Q R S T U V W X Y Z

72 Rule

The HTML to link to this page
 

The 72 rule is a formula that calculates how long it will take for something to double. The 72 rule is usually used with interest rates but the 72 rule is also used with return on investment and inflation. To use the 72 rule, simply divide 72 by the interest rate. As an example of the 72 rule: if your money earns 6 percent interest per year, just calculate 72/6 = 12; it will take 12 years for the investment to double. The 72 rule can also be used in reverse: to learn the interest rate needed to double your money in 8 years, divide 72 by 8, for an answer of 9% interest. The 72 rule can even be used to calculate the number of years it will take for the price of something to double, if you know the rate of inflation. For example, at 4% inflation, it will take 18 years, according to the 72 rule.



Rate this 72 rule definition...

Learn about investing with the Investor Glossary Term of the Day


Click here for insightful stock market charts. Where is the market headed? The answer may surprise you. Find out
with the exclusive & Barron's recommended charts of Chart of the Day.


Popular Terms: Key Rate Duration, EBITDA, phantom income, debt service coverage, inflation, liquidity ratio, wholly-owned subsidiary, limit order, Zero Cost Collar, FTSE, LIBOR, required rate of return, covered put, 401a, class C shares, diluted share, annual return, APR, stock market close, VIX, current ratio, labor relations, 144a, ex-dividend date, 1035 exchange, cancelled check, per diem, implied volatility, real GDP, minority interest, margin rate, command economy, ex-dividend, quality assurance, irrevocable trust, risk management, in escrow, reverse mortgage, retained earnings, deferred tax, dividends payable, average price per share, option premium, balance sheet, open position, 1031 exchange, stock split, FICO score, deferred revenue


Accounting | Banking | Bonds | Brokers | Economy | Futures | Mutual Funds | Options | Real Estate | Retirement | Stocks | Taxes | Technical Analysis
Investor Glossary | Term of the Day | Suggest a Term | Chart of the Day | Dogs of the Dow
©2004-2015 Investor Glossary - All rights reserved - Terms of Use