Rule of 72: Formula Explains How Compound Interest Doubles Money

Imagine you have some money, and it earns a little extra money each year, called interest.

If you take that extra money and put it back with your original money, it starts earning interest too!

This is called compounding.

The Rule of 72 is a super simple trick to guess how many years it will take for your money to become twice as big.

You just divide 72 by the yearly percentage your money grows.

For example, if your money grows by 8% each year, it will take about 9 years to double.

It shows that letting your money grow over a long time, and not touching it, helps it get much bigger, much faster.