©2016 Mr. Breitsprecher & BreitLinks (www.breitLinks.com) All Rights Reserved Rule of 72
The Rule of 72 Name: _____________________
How long will it take to double your money?
When we learn and practice business math, please keep in mind: Our goal is to get comfortable
estimating values accurately enough that we can recognize when a number makes sense and
when it has to be wrong. Typically, we use calculators or computers to calculate financial data.
However – we still need to have an idea about what type of number we should get from our
calculator or computer.
In finance, the rule of 72 is a method for estimating an investment's doubling time. The rule
number (e.g., 72) is divided by the interest percentage per period to obtain the approximate
number of periods (usually years) required for doubling. Please note – the answer we get is an
approximation. Being able to roughly determine (without a calculator) a reasonable estimate that
closely tells us when money doubles is a handy trick that all investors should learn.
1. If we can invest money at 3%, then we see that 72/3 = 24. The rule of 72 says we can
double our money at 3% in 24 years.
2. If we can invest money at 6%, then we see that 72/6 = 12. The rule of 72 says we can
double our money at 6% in 12 years.
Now you try! PLEASE SHOW YOUR WORK IF YOU WANT TO EARN CREDIT FOR
THIS ASSIGNMENT
3. How long will it take to double your
money if you can invest it at 7% interest?
4. How long will it take to double your
money if you can invest it at 9% interest?
5. How long will it take to double your
money if you can invest it at 10% interest?
6. How long will it take to double your
money if you can invest it at 12% interest?
7. How long will it take to double your
money if you can invest it at 14% interest?
8. How long will it take to double your
money if you can invest it at 16% interest?
