Rule of 72
Financial glossary definition
Definition
A quick formula to estimate how long it takes for an investment to double: divide 72 by the annual interest rate. At 8% returns, money doubles in approximately 72 ÷ 8 = 9 years.
Try It Yourself
Compound Interest Calculator
Calculate how your money grows over time with the power of compound interest.
Related Terms
Annual Percentage Yield (APY)
The effective annual rate of return on an investment or savings account, taking compound interest in…
Compound Interest
Interest calculated on both the initial principal and the accumulated interest from previous periods…
Interest Rate
The percentage charged by a lender for borrowing money, or the percentage earned on savings and inve…
Principal
The original amount of money invested or borrowed, before interest or returns. In a loan, principal …
Real Return
The return on an investment after adjusting for inflation. Real return = nominal return - inflation …
Rebalancing
The process of realigning your portfolio back to your target asset allocation by buying and selling …