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Subject:  Re: Pixy: A ? re: RULE 72 Date:  1/30/2000  6:28 PM
Author:  TMFPixy Number:  18488 of 104258

Mayoress writes:

<<Somewhere I learned a math concept called RULE 72 where you take your annual return times something and divide by 72 and that gives you the number of years it would take to double your investment.
I forget how it works. Please explain. >>

The Rule of 72 provides a very rough measure of how long it will take in years for your money to double when it's invested at a given rate of return. You divide your rate of return into the number 72 to get the years it takes for doubling the investment.

Say you get a 9% rate of return. Divide that into 72 and you get 8. That means in roughly 8 years you will have doubled your money if you get that 9% return each year on average.

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