All you do is divide 72 by the fixed rate of return to get the number of years it will take for your initial investment to double. You would need to earn 10% per year to double your money in a little over seven years. Wouldn't it be great if you could quickly determine how much your savings will be worth in the future?
What is the rule of 72?
You can apply the rule of 72 to any investment size or rate of return and can even use it to reverse engineer how much you need to invest and at what rate of return to reach a given goal. For example, if your goal is $1 million by age 65 and you are 35 currently, you know you have 30 years to reach that goal.
How do you calculate the rule of 72 in MATLAB?
The calculation of the Rule of 72 in Matlab requires running a simple command of “years = 72/return,” where the variable “return” is the rate of return on investment and “years” is the result for the Rule of 72. The Rule of 72 is also used to determine how long it takes for money to halve in value for a given rate of inflation .
