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Author: mayoress Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 76418  
Subject: Pixy: a ? about rule 72 Date: 1/30/2000 6:01 PM
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Dear Pixy,
Thank you for answering my FIRST ever post on the forum. Now I have ? #2. Somehere I had once learned the math concept of RULE 72. And guess what? I forgot how it works! Something about taking your annual return times something and divided by 72 to get the number of years it will take to double your return. Will you please explain? many thanks, Mayoress
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Author: FoolishProf One star, 50 posts Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 18491 of 76418
Subject: Re: Pixy: a ? about rule 72 Date: 1/30/2000 10:57 PM
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mayoress,

Rule 72 says divide 72 by the interest rate (percent) and this is approximately the number of years it will take to double your money.


Examples:
72/10 = 7.2 -> 10% will give you double $ in 7.2 years

72/6 = 12 -> 6% will give you double $ in 12 years

The exact time to double is found by a much more complex equation involving logarithms. Rule 72 gives very close to the exact answer.

Persevere!

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