Have you ever heard of such a thing? It's normally what you'd hear banks offer as to entice people to invest with them. They'd usually tell you how long your money will double, and most of the time, it'll take years like 5 years or more. To some, it's always a puzzle on how this thing really works. But if you are really serious to find out, there is a quick way to determine how long it will take to double your money given a certain rate of return. This is called "The Rule of 72". Discovered by the great genius himself, Albert Einstein. If you hope to double an investment earning 8% interest, just divide 72 by the rate of return (72/8) and the answer is (9). Meaning, it will take you 9 years to double your money given an 8% interest, assuming the interest is compounded annually. You may also use the rule of 72 in reverse to determine what rate of return you'll need to double your money given a certain number of years. For instance, if you have $10,000 and want to double it for a brand new car in 6 years, dividing 72 by 6 (72/6=12) will show you that you need a 12% rate of return over six years to earn $20,000, again, assuming the interest is compounded annually.
