Mentioned everywhere, the “rule of 72” is the fascinating method that gives you the idea of how powerful is compounding.

That is, you’ve heard or read that if you have money invested at an interest rate of 10%, it will take around 72/10 = 7.2 years to see your that sum doubled. For instance 10k euro would be 20k euro after 7.2 years.

Curious about the math behind this magic number, I firstly tried my self and, surprise surprise, it turns out to be inaccurate, an approximation of the real magic number. And the magic number is actually 69.3.

Here’s a link to the good formula, provided by Stanford University.

And a link to Wikipedia’s article “Rule of 72“, of course.

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