# How Long Will It Take To Double Your Money? The Rule of 72

Written by: Mark Cussen Investing is a very mathematical proposition. Despite the decisions that are made by intuition, the markets that are driven by emotions such as greed and fear and the psychological ploys used by the financial industry, it all just boils down to numbers in the end. These numbers determine how much you will get from an investment, how much tax you will pay on your gains (at least in a taxable account), and ultimately how you will live your life, at least in some respects. One of the most basic mathematical rules that you can learn is the Rule of 72, which determines the rate at which your money will double over time.

How it Works

The Rule of 72 is very simple. The number 72 acts as the divisor and the rate of interest or total return that you earn on an investment is the dividend. The quotient, or answer, represents the number of years that it will take for your money to double at that rate of return. For example, if you are earning 9 percent per year on an investment, then 72 divided by 9 equals 8. Therefore, your money will double every 8 years at this rate of return. Here is the proof:

Year 1: \$100       X 9% = \$109

Year 2: \$109       X 9% = \$118.81

Year 3: \$118.81  X 9% = \$129.50

Year 4: \$129.50  X 9% = \$141.16

Year 5: \$141.16  X 9% = \$153.86

Year 6: \$153.86  X 9% = \$167.71

Year 7: \$167.71  X 9% = \$182.80

Year 8: \$182.80  X 9% = \$199.26

Application 