You can use the

**Rule of 72**to quickly estimate how many years it takes to double your money at a given interest rate. Albert Einstein, one of the most famous scientists of modern times, loved the

**Rule of 72**and referring to compound interest, is quoted as saying:

*"Compound interest is the greatest mathematical discovery of all time"*If you can remember

**you should be able to remember this:**

*E = mc²*Remember, this formula is an approximation not 100% accurate, but pretty close. If you’d like to calculate numbers to the nearest cent, here’s the actual compound interest formula:72 ÷ interest rate = # of years to double your money

Example: 72 ÷ 10 (%) = 7.2 (years)

$1,000 invested at 10% would take 7.2 years to grow to $2,000

P_{n}= P_{0}(1+r)^{n}

Where,

P_{n}= Future Value

P_{0}= Present Value or Principal

r = interest rate (per year)

n = time (in years) a.k.a. compounding periods

*For questions, comments and suggestions, please feel free to use the commentary section or email: clemens.kownatzki@fxistrategies.com*

*As always, please help us spread the word and promote financial literacy!*

thanks for the "Rule of 72" shortcut. But according to Snopes, Einstein didnt really say anything like that:

ReplyDeletehttp://www.snopes.com/quotes/einstein/interest.asp