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2.4.5.L1
Rule of 72 Note Taking Guide
Total Points Earned
Name Xavier Swann
18
Total Points Possible
Date 03/09/2022
Percentage
Class 2A CCRD
What is the Rule of 72?
Write the equation for the Rule of 72:
The time it will take an
investment to double in value
at a given interest rate.
72
Interest Rate
= Numbers of
years to double
investment
What are three things the
Rule of 72 can determine?
How long it will take
for money to double
when interest is
compounded
The interest rate an
investment must
earn to double in a
specific time period
How many times
money will double in
a specified time
period
What are important things to know about the Rule of 72?
1. It’s only an approximation
2. Assumes the interest rate stays constant
3. Does not allow for additional contributions beyond the original principal
4. Does not account for taxes or fees
5. The rule of 72 can be applied to increasing debt.
© Take Charge Today – June 2016 – Rule of 72
The University of Arizona
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2.4.5.L1
Doug invested $2,500 in a Certificate of Deposit,
earning an interest rate of 6.5%, how long will it
take his investment to double? (Round your
answer to 2 decimal places)
11.076
6.5
How long will it take to double your investment
in the stock market if the average return is 11%?
(Round your answer to 1 decimal place)
6.54
11
Jessica has a balance of $2,200 on her credit
card, with an interest rate of 18%. How long will
it take for her debt to double?
4
18
What is a taxable account?
Checking Accounts
How is a tax deferred account different than a
taxable account?
Savings contributions taxed upon
withdrawal from an investment.
© Take Charge Today – June 2016 – Rule of 72
The University of Arizona