Mike Hinsvark
HowMoneyWorks Educator
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HowMoneyWorks Educator
Abracadabra!It's not a magic trick–it's the mental math shortcut everyone on Earth should know.
The Rule of 72 is a simple formula that can be used to approximate the number of years it will take for your money to double.
You simply divide 72 by your interest rate.
Like magic, the result is the number of years it will take your money to double.
72 ÷ interest rate = years to double
Estimating doubles can help simplify money decisions. This is a practical formula.
The higher your interest rate, the fewer years it takes your money to double.
Select an interest rate:
1^{%}
3^{%}
6^{%}
9^{%}
12^{%}
72 ÷1^{%} =72 years to double
How many times does your money need to double for you to have $1 million by the age of 67?
The national average interest rate for savings accounts is .10%.^{1}
.10^{%}
Apply The Rule Of 7272 ÷ .10% = 720
Your Money Would Double In720 years!
Compare that to
The national average interest rate for credit cards, which is over 16%.^{2}
16^{%}
Apply The Rule Of 7272 ÷ 16% = 4.5
The Money You Owe Would Double In4.5 years!
So their money doubles every time there's a new Summer Olympics and ours doubles every time there's ...
... a new civilization. That's why everyone on Earth needs to know the Rule of 72.
The Rule of 72 can help protect you from gimmicky promotions from banks, settling for opportunities that don’t give you the advantage, and taking on debt that might take forever to pay off.
Contact me to learn more about how the Rule of 72 impacts your life.