What does rule of 72 mean?
Definitions for rule of 72
rule of 72
This dictionary definitions page includes all the possible meanings, example usage and translations of the word rule of 72.
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Wikidata
Rule of 72
In finance, the rule of 72, the rule of 70 and the rule of 69 are methods for estimating an investment's doubling time. The rule number is divided by the interest percentage per period to obtain the approximate number of periods required for doubling. Although scientific calculators and spreadsheet programs have functions to find the accurate doubling time, the rules are useful for mental calculations and when only a basic calculator is available. These rules apply to exponential growth and are therefore used for compound interest as opposed to simple interest calculations. They can also be used for decay to obtain a halving time. The choice of number is mostly a matter of preference, 69 is more accurate for continuous compounding, while 72 works well in common interest situations and is more easily divisible. There are a number of variations to the rules that improve accuracy. For periodic compounding, the exact doubling time for an interest rate of r per period is where T is the number of periods required. The formula above can be used for more than calculating the doubling time. If you want to know the tripling time, for example, simply replace the constant 2 in the numerator with 3. As another example, if you want to know the number of periods it takes for the initial value to rise by 50%, replace the constant 2 with 1.5.
Numerology
Chaldean Numerology
The numerical value of rule of 72 in Chaldean Numerology is: 4
Pythagorean Numerology
The numerical value of rule of 72 in Pythagorean Numerology is: 5
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"rule of 72." Definitions.net. STANDS4 LLC, 2024. Web. 25 Apr. 2024. <https://www.definitions.net/definition/rule+of+72>.
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