Rate of return

Ever wondered how fast your money grows with interest?

Imagine you save $1,000 in a bank account that offers a 6% annual interest rate. How long will it take for your savings to double?

Your money grows faster when interest compounds. The Rule of 72 helps you quickly estimate how long it will take for your investment to double by dividing 72 by the annual interest rate.

Example

With a 6% interest rate, dividing 72 by 6 gives you 12 years to double your $1,000 savings.

Remember this

The Rule of 72 simplifies estimating investment growth time.

Text adapted from Wikipedia, licensed under CC BY-SA 4.0.

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