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by wallflower 5743 days ago
Rule of 72

Divide 72 by the periodic interest rate to find the number of periods to double the money.

http://en.wikipedia.org/wiki/Rule_of_72

2 comments

Great rule, should be the very first thing taught in high school when you get to exponents.

Dr. Albert Bartlet of University of Colorado has an excellent lecture on its implications for population growth, environmental degradation, and other big picture problems:

http://www.youtube.com/watch?v=F-QA2rkpBSY

Funny you mention that "rule". It's not very accurate, and becomes less accurate the higher the inflation/interest rate goes.

I just worked it out; at 80% inflation it would take 1.18 months to double, not 0.9 like the rule of 72 would suggest. That's a fair difference, and certainly more in line with intuitive expectation.

Not that the OP isn't being overly finicky. Both round to 1, and only one significant digit was given anyway. But still.