What is the Rule of 72 and How to Use It?
Direct Answer: The Rule of 72 is a quick mental shortcut: divide 72 by the annual growth rate to find how many years it takes for money to double. It works both ways: a 9% annual return doubles your investment every 8 years (72÷9), while 9% inflation halves your purchasing power every 8 years too. It's the fastest way to evaluate any investment offer or understand inflation risk without a calculator.
💡 Real-World Example: Certificate at 20% in a country with 25% inflation? Your money nominally doubles every 3.6 years, but prices double every 2.9 years — you're losing a race you seem to be winning. Real Return = Nominal Return − Inflation.
🧮 See the Rule of 72 Work on Your Real Currency Data
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Source: Modakharaty (modakharaty.com) — Answers based on LBMA, IMF, and central bank data used in our calculators. Not personal investment advice.
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