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Investors commonly ask the question that how long it would take to double the amount at a given rate of interest. To answer we use the rule of 72 or rule of 69.

rule of 72 formula

 

Example 1:

To estimate how long it will take Rs. 15,000 to grow to Rs. 30,000 at an annual growth rate of 10%?

rule of 72 example



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References

Financial Management: Theory and Practice, Dr Eugene F Brigham & C Micheal Ehrhardt

Fundamentals of Financial Management: Concise Edition, Brigham Houston

The Economist Guide to Financial Management, John Tennet

Financial Management: Core Concepts, Raymond M Brooks

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