The Rule Of 72
The rule of 72 is a formula that can help you calculate out times needed to double your savings in a glimpse. The first time I heard of it, it sounds so magic. I heard it sometimes ago from a forum and now I going to share it here. Here it go..
1)Let’s say you have RM10k in bank with interest 9% per annum. So when your savings will hit 20K?
Rule 72 applied= 72/9 = 8 years.
Your savings will become double (RM20k) in 8 years times with interest 9% per annum.
2) RM50k with 12% per annum
Rule 72 applied= 72/12=6 years.
Your savings will become double (RM100k) in 6 years with interest 12% per annum.
3) Interest needed so that your can double up your savings in 10 years time
Rule 72 applied= 72/10 = 7.2%
Your savings will double in 10 years with 7.2% per annum.
Simple maths right? Hope this piece of information help you become a better personal financial planner.
