How accurate is rule of 72?

How accurate is rule of 72?

The Rule of 72 is much more accurate than I thought. It's off by less than 2 months for rates of return between 6% and 12%. As you can see above, the sweet spot is right at 8%, where the Rule of 72 estimation is off by only 0.01 years.

Is there a rule of thumb to enhance the rule of 72?

Or, if your money is earning a 5 percent interest rate, you'll double it in 14.4 years (72 divided by 5 equals 14.4). If your money is earning a measly 1 percent interest rate, it will take you—yep, you guessed it—a whopping 72 years to double it. Remember: this is a “rule of thumb,” not an iron-clad law.

What is the difference between the rule of 70 and the Rule of 72?

The rule of 70 and the rule of 72 give rough estimates of the number of years it would take for a certain variable to double. When using the rule of 70, the number 70 is used in the calculation. Likewise, when using the rule of 72, the number 72 is used in the calculation.

Who invented the rule of 72?

Albert EinsteinThe Rule of 72 was discovered by Albert Einstein and he considered it his greatest discovery even over E=MC2 (Squared). He considered it the most powerful force on earth. In its simplest form Einstein explained it this way. When you invest money, you earn interest on your capital.