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Rule of 72 & 69 / Doubling period calculation / Rule of thumb
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The Rule of 72 is a simplified formula that calculates how long it'll take for an investment to double in value, based on its rate of return.
Rule of 69 is a general rule to estimate the time that is required to make the investment to be doubled, keeping the interest rate as a continuous compounding interest rate, i.e., the interest rate is compounding every moment. It does not provide the exact time but is very close to proximity without using the pure mathematical formula.
Rule of 72: It is used for the simple compound rate of interest.
Rule of 69: It is used when the interest rate is given is continuous compounding.
#ruleofthumb #ruleof69
Rule of 69 is a general rule to estimate the time that is required to make the investment to be doubled, keeping the interest rate as a continuous compounding interest rate, i.e., the interest rate is compounding every moment. It does not provide the exact time but is very close to proximity without using the pure mathematical formula.
Rule of 72: It is used for the simple compound rate of interest.
Rule of 69: It is used when the interest rate is given is continuous compounding.
#ruleofthumb #ruleof69
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