What is rule number 72 in Finance?
Rule number 72 is one of the most commonly used rules in finance, but what does it mean? This rule states that the time it takes for an investment to double is equal to 72 divided by the interest rate. In other words, if you want to know how long it will take for your money to double at a given interest rate, you can simply divide 72 by that rate. What is compounding? Compounding is when you earn interest on your investment, and then you reinvest that money and earn interest on the new total. This process repeats itself over time, and the longer you invest, the more your money will grow. Compounding is a powerful tool that can help you reach your financial goals. Rule number one in…