The "Rule of 72" is a simple, quick and easy way to calculate the length of time in which money doubles at a certain interest rate. To find the length of time in which money doubles at 6%, divide 72 by 6 and you get 12 years. At 12% money doubles in 6 years. The following interest rate calculations (doubling) illustrates the impact of doubling at these different rates.
When you consider that mathematical factor and then make the necessary adjustments to the investable amount and the rate of growth adjusted for taxes on the investment you'll be well on your way to understanding the investment process; and be far better able to select the "correct" investment tax structure for your assets, i.e, retirement plans, tax deferred investment accounts, charitable trusts and the like. Visit Elliott Wave Investers for a money manager that focuses on the power of compound interest.
Future Values at Different Growth Rates Assuming a one time LUMPSUM $10,000 Initial Investment at the beginning of Year #1:
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