Double Your Money, “The Rule of 72” principle

The Rule of 72 is the fastest way to determine how many years it will take to DOUBLE YOUR MONEY given the annual interest rate. It can also be used to calculate how much interest your money should earn per year if you want to double your money in given amount of years.

Equation # 1: Number of Years to Double Your Money = 72 / Annual interest rate

Divide 72 by the annual interest rate and you’ll get the number of years it would take to double your money. For example, you are being offered by a financial institution a 10 percent interest rate per year. Using Equation # 1, that’s 72 divided by 10 and the result is 7.2. It will take a little over 7.2 years for your investment to double on a 10 percent annual interest rate.

Equation # 2: Annual interest rate to Double Your Money= 72 / Number of years

Divide 72 by the number of years and you’ll get the annual interest rate required to double your money. For example, you invested in a double your money program for 6 years and you want to know the interest rate you’ll earn per year. Using Equation # 2, that’s 72 divided by 6 and the result is 12. You’ll earn 12 percent annual interest rate.

Double Your Money

By the way, Double Your Money program is usually offered by banks. Before, they usually give it on a 5-year basis. Nowadays, I think it’s 6 years. An annual interest rate of about 10 percent or above is a good return, an investment you may want to check.

However, this is offered on limited time only and limited slots. So if you are interested, better ask your trusted banks about this and get a tip on when they will be having this kind of offer. Also, banks usually require a minimum of Php 100,000 or Php 200,000 investment in this.


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