"Rule of 72"

Mathematicians say that you can find out how long it will take you to double your money simply by dividing the number 72 by the interest rate.

Divide the rule number (72) by the annual interest rate (R) to find out the approximate time (T) required for doubling your money.

• For an instance, in your birthday your parents give you ?1000/-.

And on next day, you put the money in your account that earns 6 percent (6%) interest a year.

Question is that how long will it take to grow to ?2000/-?

• Now divide 72 by the interest rate in our example 72/6(rate of interest)= 12 years
• So in 12 years, your money will have doubled to ?2000/-

ACCORDING TO COMPOUND INTEREST THE ACTUAL AMOUNT IS ?2012

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