id: 02336008
dt: j
an: 2000f.04345
au: Smith, Will
ti: The 72 rule and other approximate rules of compound interest.
so: Parabola 36, No. 1, 7-15 (2000).
py: 2000
pu: AMT Publishing, Australian Mathematics Trust, University of Canberra,
Canberra; School of Mathematics \& Statistics, University of New South
Wales, Sydney
la: EN
cc: F80
ut:
ci:
li:
ab: There is a simple approximate rule of thumb used by investors and
accountants to estimate the time taken in years, $n$, for an investment
to double with an interest rate of $R\%$, or indeed for a debt to
double if left unpaid. One simply divides 72 by $R$ to estimate the
time in years. The rule is known as “Rule 72” or “the 72 Rule”
and is often attributed to the investment advisor Henri Aram who
popularized it. This rule and a more accurate approximation are derived
and discussed.
rv: