The Rule of 72?

3 Pages Posted: 30 May 2014

See all articles by John Spitzer

John Spitzer

State University of New York (SUNY) at Brockport - Department of Business Administration & Economics

Sandeep Singh

SUNY at Brockport - Department of Business Administration and Economics

Date Written: May 28, 2014

Abstract

The Rule of 72, a staple in financial circles for estimating the amount of time required for an investment to double in value, is shown to be quite inaccurate at today's high rates of return. The derivation of the Rule of 72 provides insight into how the rule can be improved. A new rule of thumb, which provides a very high level of accuracy, is obtained by a simple regression.

Keywords: Future value, Rule of 72, Regression, Retirement wealth, Saving

Suggested Citation

Spitzer, John and Singh, Sandeep, The Rule of 72? (May 28, 2014). Journal of Financial Counseling and Planning, Vol. 10, No. 1, 1999, Available at SSRN: https://ssrn.com/abstract=2442924

John Spitzer (Contact Author)

State University of New York (SUNY) at Brockport - Department of Business Administration & Economics ( email )

Brockport, NY
United States

Sandeep Singh

SUNY at Brockport - Department of Business Administration and Economics ( email )

Brockport, NY 14420
United States
716-395-5519 (Phone)
716-395-2542 (Fax)

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