Wednesday, July 18, 2007

Law of 72

The Law of 72 says that if you divide 72 by the percent return on investment you expect, then the result is the number of years it will take for your initial amount to double.
For example:
Law 72
If assume 10% rate of return then it will take 7.2 years to double.
So, if you have $1000 today, in 7.2 years invested at 10% you will have $2000 ignoring taxes, cost of investment, etc.
Some other examples:


72/10% = 7.2 years to double


72/7.5% = 9.6 years
72/5% = 14.4 years to double


72/2.5% = 28.8 years


72/1.25% = 57.6 years

2 comments:

Anonymous said...

Thanks for sharing :) very useful .

Anonymous said...

Thanks for sharing , very useful :)