The Rule of 72

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What it is

"The Rule of 72" is the answer to the question, "What rule tells us how many years it takes to realize we would have had twice as many small, green pieces of paper if we had invested them at a given rate of return instead of stuffing them in our mattress?"

More precisely

Suppose you buy a certificate of deposit that is supposed to accumulate 6% of interest compounded annually. To calculate how many years it will take for the value of your certificate to double, divide 6 into 72.A bundle of money which has been chained and padlocked

Why?

Don't ask. For more about The Rule of 72 see Investing For Beginners1
1But they won't explain why the number you have to divide the rate of return into is 72. Some questions are intrinsically unanswerable.

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Infinite Improbability Drive

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