




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...




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


 