In this video, we explain the Rule of 72, a simple formula to estimate the number of years it takes for your investment to double. By dividing 72 by your annual return rate, you can quickly determine this timeframe.
Here's how it works:
If your annual return is 7%, divide 72 by 7.
72 / 7 = 10.2. This means your money will take approximately 10.2 years to double.
If your annual return is 15%, divide 72 by 15.
72 / 15 = 4.8. This means your money will take about 4.8 years to double.
If your annual return is 30%, divide 72 by 30.
72 / 30 = 2.4. This means your money will take just 2.4 years to double.
By using the Rule of 72, you can easily understand the impact of different annual returns on your investments.
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