Can you explain the law of 72 in terms of how money grows?

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Can you explain the law of 72 in terms of how money grows?

What is the formula to calculate how many years it takes for your money to doulble?

2007-03-22 11:30:05 · 2 answers · asked by Dan P 1 in Business & Finance ➔ Investing

2 answers

Essentially you divide the interest rate your money is earning into 72 to see how long it will take to double.

Money earning 6% would double in 12 years. 72/6=12.

That's it!

2007-03-22 11:42:08 · answer #1 · answered by Uncle Pennybags 7 · 3⤊ 0⤋

take 72 and divide it by the interest rate your earning. If the overall market gains 11% it would take 6 1/2 years to double your money. I assume your asking about a Roth IRA

2007-03-24 17:39:21 · answer #2 · answered by Jason H 2 · 0⤊ 0⤋