Created by Mr. Lord

Created by Mr. Lord.

The "Rule of 72" is a rule of thumb that can help you compute when your money will double at a given interest rate.

To use this simple rule, you just divide the annual interest into 72. For example, if you get 6% on an investment and that rate stays constant, your money will double in 72 / 6 = 12 years.

Of course you can also compute an interest rate if you are told that your money will double in a given number of years. For example, if your money has to double in two years so that you can buy your significant other that Mazda Miata, you'll need 72 / 2 = 36% rate of return on your stash.

1. How long would it take to double an investment of $6,000 at 8%.

2. How much would an investment of $6,000 at 8% be worth after 36 years (when you are around 55 and ready to retire early)?

3. Are ownership investments higher or lower risk? Give an example

4. If unlucky Jane invested $5,000 in a lending investment at a guaranteed rate of return of 4% how long would it take to double her money?

5. Because unlucky Bob did not start investing early enough he needs to get higher returns on his investments. If he wanted to turn his $5,000 into $10,000 in five years what rate does he need to get on his investment?

6. How long would it take for an investment to double if the rate of return was 15%?

7. What rate of return do we need to make our investments double every 3 years?

8. If an investment returns a rate of 24%, how much would a $5,000 investment be worth after 30 years.

9. If an investment returns a rate of 14.4%, how much would a $25,000 investment be worth after 25 years?

10. How much would a $20,000 investment be worth after 30 years with an average 14.4% return. Created by Mr. Lord.