HINTS FROM HELOISE
Dear Readers:
Want an easy and fun way to see how money can grow over time? Want to show your kids or grands the magic of compound interest? Let’s look at The Rule of 72:
The Rule of 72 is a method used to calculate the amount of time it might take for your investment dollars to double in value. Here’s how it works.
Take the interest rate you are earning and divide 72 by that number.
The number you get is the amount of years it will take for your money to double.
Example: Your investment pays 6% interest, compounded annually. Divide 72 by 6; your money will double in 12 years. And it works if you flip it, too: 72 divided by 12 (if your investment pays 12%) is 6; your dollars will double in six years.
Investing money involves risk, of course; always consult a financial adviser for investment hints.
— Heloise