rule of $72$ decorative image of formula.

Years do double $=72/$ interest rate

Where the interest rate equals the rate of return on an investment

Rule of $72$

The Rule of $72$ is a quick, useful formula that is popularly used to estimate the number of years required to double the invested money at a given annual rate of returnLinks to an external site..

The Rule of $72$ is a simplified formula that calculates how many years & months it'll take for an investment to double in value, based on its rate of return.

The Rule of $72$ applies to compounded interest rates and is reasonably accurate for interest rates that fall in the range of $6\%$ and $10\%.$

The Rule of $72$ can be applied to anything that increases exponentially, such as GDP or inflation; it can also indicate the long$-$term effect of annual fees on an investment's growth. $($Investopedia$)$

To find out how fast prices $($or your savings$)$ will double, use the Rule of $72$: Just divide $72$ by the annual inflation $($or interest$)$ rate.

EXAMPLE: Rule of $72$

An annual inflation rate of $4$ percent, for example, means prices will double in $18$ years $(72-$: $4=18).$

Regarding savings, if you earn $6$ percent, your money will double in $12$ years $(72-$: $6=12).$

Solve and answer the following $5$ problems using the Rule of $72$ Formula. Show your work $($how you got the answers$).$

If the value of land in an area is increasing $6$ percent a year, how long will it take for property values to double?

If you earn $10$ percent on your investments, how long will it take for your money to double?

At an annual interest rate of $5$ percent, how long will it take for your savings to double?

If you have $$125,000$ in your retirement $(401($k$))$ and you earn $8$ percent a year on average, how long will it take for your money to double?

If the cost of cable internet is $$75$ a month and price increases $7$ percent a year, how long will it take for your bill to double?