How to Know if an Investment is Good Value? Use the rule of 72.


Have you ever looked at an investment opportunity and thought “How long will it take me to double my money at a given rate of return?” The Thumb rule of 72 comes in handy here as it gives a quick answer.

Just divide 72 by the rate of return and you have the number of years it takes to double your money, roughly.

For example, if the interest rate is 3%, your money doubles in about 24 years (72/3 = 24).

The rule of 72 is quick and easy tool that can help you weigh your investment options.

 





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