Applying a little bit of algebra we can rearrange the rule of 72 equation to calculate the number of years required to double your money with a given interest rate compounded annually. The rule of 72 is a shortcut to estimate the number of years required to double your money at a given annual rate of return.
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The rule of 72 formula is calculated by multiplying the investment interest rate by the number of years invested with the product always equal to 72.
Rule of 72 worksheet. How long will it take to double doug s investment. The rule states that you divide the rate expressed as a. Rule of 72 key 1.
72 6 5 11 years 2. Children learn best when their parents are good examples of planning for the future and putting their money to work. Worksheet will open in a new window.
Rule of 72 worksheet free printable reading with questions for grade 7 12 economics pdf file. For example the rule of 72 states that 1 invested at an annual fixed interest rate of 10 would take 7 2 years 72 10 7 2 to grow to 2. How the rule of 72 works.
This table illustrates just how close the rule of 72 is to the actual doubling time. Some of the worksheets displayed are rule of 72 the rule of 72 rule of 72 math work chapters 11 12 grammar and mechanics work writing rules es1 saving and investing normal distributions math 728. Once you find your worksheet click on pop out icon or print icon to worksheet to print or download.
Use this interactive quiz and worksheet to test your knowledge of the rule of 72 in finance. One of the quickest ways to teach your children about financial responsibility is to teach them the famed rule of 72. Remember the rule of 72 is an approximation but it s a remarkably accurate one we can use with confidence for our rule 1 calculations.
The average stock market return since 1926 has been 11 0. The exact number of years it takes to double once at a 24 growth rate is 3 2 years which is to say that the rule of 72 is very accurate around 10 but gets less accurate the farther from 10 we go. Both parents and kids should learn this little rule of saving and investment.
Nd the accurate doubling time the rule of 72 is useful for mental calculations or when only a basic calculator is available. According to the rule of 72 how often will an individuals investment double. The printable worksheet can serve as a study guide.
Doug invested 2 500 into a certificate of deposit earning 6 5 0 interest. Interest rate actual years rule of 72 1 69 66 72 00 2 35 00 36 00 3 23 45 24 00 4 17 67 18 00 5 14 21 14 40 6 11 90 12 00 7 10. 72 11 6 5 years 3.
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