Rule of 72

by astanhaus


How long would it take me to double my weight? How long would it take to double my $$?

I’ll spare you the game plan for the former, it’s deliciously gross.

Now the latter… that I’m willing to discuss. The key # is 72.

If you divide 72 by an interest rate, the answer will tell you how many years until an amount of $$ is twice as much! Compound interest is truly a marriage of magic and math!

(click on the bold-faced vocab words:))

If I deposit $500 in a savings account with an interest rate of 5% (yes, not realistic for the times, but a girl can dream) it will be $1000 in … 72/5= 14.4… approximately 14 years!

I’ll be making money other ways in the meantime. But, neat to know about!


(Originally published on Amanda Stanhaus’s financial literacy blog: XO, Bettie.)