“The most powerful force in the universe is compound interest” – Albert Einstein. Albert Einstein’s greatest discovery was not the theory of relativity, it was the Rule of 72. (Although some people say that the rule existed long before he was born, most would agree however that he has popularized it) What has the Rule of 72 have to do with investing? Basically knowledge of the Rule of 72 is the basic building block of learning that each budding investor should have. Simply stated the Rule of 72 helps you determine the following: 1.) What interest rate you should avail of in order for your money to double quickly. 2.) How many years does it take for your money to double. In a nutshell the Rule of 72 is stated as follows: 72 divided by interest rate return = No. of years it takes for your money to double. So, if you put P 100,000.00 in a bank account, it will take 72 years for your money to become P 200,000.00 since the bank only … [Read more...]