The Rule of 72 is useful in determining how fast money will grow. Take the Annual return from any investment , express as percentage and divided it into 72. The result is the number of years it will take to double your money.
Many investors use the simple Rule of 72 for their Financial planning. This simple equation allows a quick estimate to the number of years it will take to double your money for a give annual return.
For Example If you invested some money in assets like Fixed Deposits with interstate 4, then It will take 18 years to double your money.
Like wise you can plan for your financials based on time span & Risk.
The Rule of 72 offers a quick and easy way for investors to project the growth of their investments. By showing how quickly you can double your money with minimal effort, this rule beautifully demonstrates the magic of compounding for building wealth.
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