A few years back, there were certificate of deposits offered that will double your money if you keep it untouched for five years. It was a good product but none of the banks are offering them now.
If you want to do the same now, do you know what kind of returns should you be aiming? You might be surprised to know how easy it is to estimate.
The rule of 72.
This is a simple formula used to estimate the number of years it will take for your money to double. By dividing the number 72 with the interest rate earned, you can approximate the duration you need to wait. By just reversing the formula, we can determine that you need around 14.4 percent returns to double your money in five years.
Now, let us use the current bank rates (between .5 and 2.5 % return per annum). Based on the rule of 72, it would take between 28 to 144 years to double your money.
Do you think you can wait that long? Or should you be thinking of other ways to invest?
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