The Rule of 72 (with calculator) (2024)

FAQs

What is the Rule of 72 calculator? ›

It's an easy way to calculate just how long it's going to take for your money to double. Just take the number 72 and divide it by the interest rate you hope to earn. That number gives you the approximate number of years it will take for your investment to double.

Using the rule to estimate compounding periods

For instance, if you were to invest $100 with compounding interest at a rate of 9% per annum, the rule of 72 gives 72/9 = 8 years required for the investment to be worth $200; an exact calculation gives ln(2)/ln(1+0.09) = 8.0432 years.

The Rule of 72 is a simple way to determine how long an investment will take to double given a fixed annual rate of interest. Dividing 72 by the annual rate of return gives investors a rough estimate of how many years it will take for the initial investment to duplicate itself.

To calculate the time period an investment will double, divide the integer 72 by the expected rate of return. The formula relies on a single average rate over the life of the investment.

The rule of 70 calculates the years it takes for an investment to double in value. It is calculated by dividing the number 70 by the investment's growth rate. The calculation is commonly used to compare investments with different annual interest rates.

So, if the interest rate is 6%, you would divide 72 by 6 to get 12. This means that the investment will take about 12 years to double with a 6% fixed annual interest rate.

The rule of 70 is used to determine the number of years it takes for a variable to double by dividing the number 70 by the variable's growth rate. The rule of 70 is generally used to determine how long it would take for an investment to double given the annual rate of return.

Using the rule of 72 allows you to have a solid idea of when your investment would double just from the investment rate. Very conveniently, the number 72 divides cleanly into 1, 2, 3, 4, 6, 8, 9 and 12, allowing for a quick and simple division problem instead of your usual compound interest problem.

Left click and hold on the bottom right corner of cell B2 and drag the cell down to cell B6. Now, use the rule of 72 to calculate the approximate number of years by entering "=72/A2" into cell C2, "=72/A3" into cell C3, "=72/A4" into cell C4, "=72/A5" into cell C5 and "=72/A6" into cell C6.

72 has a total of 12 factors: 1, 2, 3, 4, 6, 8, 9, 12, 18, 24, 36, and 72. There is a trick to calculate the total number of factors of a number. For example, 72 = 2 × 2 × 2 × 3 × 3 = 2³ × 3². We get the prime factorizations of 72 as 2³ × 3².

What equations make 72? ›

36 x 2 = 72, 24 x 3 = 72, 18 x 4 = 72, 12 x 6 = 72, 9 x 8 = 72. Since 2 and 3 are primary numbers, they have no further factors. 1 is of course a factor. So, we can multiply 1, 2 and 3 to get 72.

Hence, 72 is divisible by 2. 72 divided by 2 gives 36.

The Rule of 72 is a way to estimate how long it will take for an investment to double at a given interest rate, assuming a fixed annual rate of interest. You simply take 72 and divide it by the interest rate number. So, if the interest rate is 6%, you would divide 72 by 6 to get 12.

MATH 72 - (MA) Analytic Geometry and Calculus II. Description: Fall, Spring. Exponential, logarithmic, and inverse trigonometric functions, techniques of integration, improper integrals, introduction to differential equations, parametric equations, polar coordinates, infinite sequences and series.

The Rule of 72 is a calculation that estimates the number of years it takes to double your money at a specified rate of return. If, for example, your account earns 4 percent, divide 72 by 4 to get the number of years it will take for your money to double. In this case, 18 years.

Final answer:

It will take approximately 15.27 years to increase the $2,200 investment to $10,000 at an annual interest rate of 6.5%.

The Rule of 72 works best in the range of 5 to 12 percent, but it's still an approximation. To calculate based on a lower interest rate, like 2 percent, drop the 72 to 71; to calculate based on a higher interest rate, add one to 72 for every three percentage point increase.

Calculator Use

Divide 72 by the interest rate to see how long it will take to double your money on an investment. Alternatively you can calculate what interest rate you need to double your investment within a certain time period.

The Rule of 72 states that by dividing 72 by the annual interest rate, you can estimate the number of years required for an investment to double. ● The Rule of 69.3 is a more accurate formula for higher interest rates and is calculated by dividing 69.3 by the interest rate.