How to Double Your Money? Know The Rule of 72

If you are wondering when your money will get doubled, an understanding of the "Rule of 72" will give you an immediate idea.

If you divide 72 by the rate of interest earned (assuming interest compounded annually), it will give you the approximate number of years it will take for your money to get doubled.

Let's understand it with a simple example. If you have put your money in an investment which will yield you 10 per cent annually, then your money will get doubled in nearly 72/10 or 7.2 years.

So if you want to reduce the time, you will have to increase the denominator - that is the rate of return from your investment. Basically, the higher the rate of return the lower will be the time taken for your money to get doubled.

The following table explains how much time it is going to take you depending on the rate of return.