Have you ever wondered how much some of your investments will be worth 10 years from now? How about 20 years? You can easily figure it out without using a financial calculator. Just use the Rule of 72. Let's say you invested $10,000 in a fixed annuity earning 6% a year. In 24 years, your assets will be worth about $40,000. How does it work? The Rule of 72: Divide the number 72 by the interest you earn, and it will give you the number of years it will take for your money to double. Using the above example, 72 divided by 6 equals 12 years for doubling. Since there are two doubling periods in 24 years, the original $10,000 would be worth $20,000 in 12 years, and $40,000 in 24 years. Using this same Rule, an investment earning 8% would double in about 9 years, and a 12% investment would double in 6 years.
You Can Easily Figure it Out Without Using a Financial Calculator