Compound Interest is Just a Beautiful Thing

Rule of 72- Compound Interest

Compound Interest-Interest paid on original principal and also on the accrued and unpaid interest which has accumulated.

The rule of 72 is a mathematical formula that helps determine how many years it would take to double your savings or investments. To find out the years to double your money you first need to take 72 then divide it by the interest.

Example:

Money doubles every 18 years		Money doubles every 6 years
72/4=18		72/12=6
Age	4 %	Age	12 %
18	$5,000	18	$5,000
36	$10,000	24	$10,000
54	$20,000	30	$20,000

Starting from 18 years old, 12% is a better deal.