Rule Of 72

`see variables`

How long (*n*) does it take to double your money at a specified interest rate (*i*)?

What interest rate (*i*) would double your money over a specified number of years (*n*)?

Theoretically,

(1)\begin{align} {(1+i)}^{n} = 2 \: \Rightarrow \: i = {2}^{1/n } - 1 \: \Rightarrow \: n = \frac{ {log}_{e} (2) }{{log}_{e} (1+i)} \end{align}

If you would rather avoid using natural logarithms, the "rule of 72" provides a simple approximation.

(2)\begin{align} n = \frac{72 }{100i} \end{align}

and

(3)\begin{align} i = \frac{72}{100n} \end{align}

page revision: 8, last edited: 07 Jul 2007 17:45