rule of 72
rule of 72 definition - business
rule of 72
The mathematical rule used in approximating the number of years it will take a given investment to double in value. The number of years to double an investment is calculated by dividing 72 by the annual rate of return. Thus, an investment expected to earn 10% annually will double the investor's funds in 72/10 , or 7.2 years. Dividing 72 by the number of years in which the investor wishes to double his or her funds will yield the necessary rate of return.
The American Heritage® Dictionary of Business Terms Copyright © 2009 by Houghton Mifflin Harcourt Publishing Company. Published by Houghton Mifflin Harcourt Publishing Company. All rights reserved.
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rule of 72 definition - finance
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