http://www.twincommas.com/how-to-double-your-money-the-rule-of-72 Wealth, Money, and Entrepreneurship Mon, 23 Jan 2012 19:50:30 +0000 hourly 1 http://wordpress.org/?v=3.3.1 http://www.twincommas.com/how-to-double-your-money-the-rule-of-72/comment-page-1#comment-394 david Mon, 24 Oct 2011 15:12:37 +0000 http://www.twincommas.com/how-to-double-your-money-the-rule-of-72#comment-394 THANK YOU ALOT !!!!!!! :) THANK YOU ALOT !!!!!!! :)

]]> http://www.twincommas.com/how-to-double-your-money-the-rule-of-72/comment-page-1#comment-393 david Mon, 24 Oct 2011 15:11:50 +0000 http://www.twincommas.com/how-to-double-your-money-the-rule-of-72#comment-393 Enter the rule of 72. Simply divide 72 by your expected average annual interest rate! This gives you a very good estimate of how long it will take to double your money, including the effect of compounding interest. So, for our example above, to double your money given a 10% yearly return, it would take a little more than 7 years. If you could manage a 24% interest rate, it would only take 3 years to double your money! Below is a table summarizing this for several rates. Enter the rule of 72. Simply divide 72 by your expected average annual interest rate! This gives you a very good estimate of how long it will take to double your money, including the effect of compounding interest. So, for our example above, to double your money given a 10% yearly return, it would take a little more than 7 years. If you could manage a 24% interest rate, it would only take 3 years to double your money! Below is a table summarizing this for several rates.

]]> http://www.twincommas.com/how-to-double-your-money-the-rule-of-72/comment-page-1#comment-392 justin Mon, 24 Oct 2011 15:10:42 +0000 http://www.twincommas.com/how-to-double-your-money-the-rule-of-72#comment-392 Thanks for the explanation. The only quibble I have is that your reasoning of why 72 is used instead of 69.3 (or 69, or 70) is not too convincing. No doubt 72 is easier to use in mental arithmetic than 69.3, but it’s less obvious that it’s easier to use than 70. The real reason is that 72 is more accurate for the values of r that are likely to arise in actual calculations. For r=5%, ln(1+r) = .9758*r and for r=10%, ln(1+r)=.9531*r So for 5% interest 71.0 would be a much better number to use than 69.3, and for 10% interest 72.7 would be better than 69.3. So for a wide range of realistic interest rates, 72 leads to superior approximations than 69.3. Thanks for the explanation. The only quibble I have is that your reasoning of why 72 is used instead of 69.3 (or 69, or 70) is not too convincing. No doubt 72 is easier to use in mental arithmetic than 69.3, but it’s less obvious that it’s easier to use than 70. The real reason is that 72 is more accurate for the values of r that are likely to arise in actual calculations. For r=5%, ln(1+r) = .9758*r and for r=10%, ln(1+r)=.9531*r So for 5% interest 71.0 would be a much better number to use than 69.3, and for 10% interest 72.7 would be better than 69.3. So for a wide range of realistic interest rates, 72 leads to superior approximations than 69.3.

]]> http://www.twincommas.com/how-to-double-your-money-the-rule-of-72/comment-page-1#comment-391 nae nae Mon, 24 Oct 2011 15:09:59 +0000 http://www.twincommas.com/how-to-double-your-money-the-rule-of-72#comment-391 this leads to alot of knoweledge this leads to alot of knoweledge

]]> http://www.twincommas.com/how-to-double-your-money-the-rule-of-72/comment-page-1#comment-390 la la Mon, 24 Oct 2011 15:09:02 +0000 http://www.twincommas.com/how-to-double-your-money-the-rule-of-72#comment-390 it is good to know about the rule of 72!!!!!!!!! it is good to know about the rule of 72!!!!!!!!!

]]> http://www.twincommas.com/how-to-double-your-money-the-rule-of-72/comment-page-1#comment-207 David Fri, 09 Jul 2010 20:07:35 +0000 http://www.twincommas.com/how-to-double-your-money-the-rule-of-72#comment-207 Thanks for the explanation. The only quibble I have is that your reasoning of why 72 is used instead of 69.3 (or 69, or 70) is not too convincing. No doubt 72 is easier to use in mental arithmetic than 69.3, but it's less obvious that it's easier to use than 70. The real reason is that 72 is more accurate for the values of r that are likely to arise in actual calculations. For r=5%, ln(1+r) = .9758*r and for r=10%, ln(1+r)=.9531*r So for 5% interest 71.0 would be a much better number to use than 69.3, and for 10% interest 72.7 would be better than 69.3. So for a wide range of realistic interest rates, 72 leads to superior approximations than 69.3. Thanks for the explanation. The only quibble I have is that your reasoning of why 72 is used instead of 69.3 (or 69, or 70) is not too convincing. No doubt 72 is easier to use in mental arithmetic than 69.3, but it’s less obvious that it’s easier to use than 70. The real reason is that 72 is more accurate for the values of r that are likely to arise in actual calculations. For r=5%, ln(1+r) = .9758*r and for r=10%, ln(1+r)=.9531*r So for 5% interest 71.0 would be a much better number to use than 69.3, and for 10% interest 72.7 would be better than 69.3. So for a wide range of realistic interest rates, 72 leads to superior approximations than 69.3.

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