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What is the Rule of 72?

The Rule of 72 estimates how many years money takes to double: divide 72 by the yearly return.

It is a quick mental check, most accurate for returns between about 4% and 12%. It works for inflation too, showing how fast prices double.

Example

At 6% a year, money doubles in about 12 years, because 72 divided by 6 is 12.

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