In this period when interest rates are gradually rising, it will attract the attention of investors, especially those who invest in deposit rates. rule of 72allows us to easily calculate how long it will take for your money to double.

With this simple mathematical rule according to the annual interest rate It is possible to easily predict the growth rate of money.

The roots of the rule of 72 are known to date back to ancient times.

In the sources, Italian mathematician Luca Pacioli It is said that he referred to this rule in his extensive mathematics book called Summa de Arithmetica and that its roots date back to 1494.

Simply put, the rule of 72 means that your money double time It is a simple formula used to calculate.

This rule is based on the principle that the number 72 is an ideal constant to simply estimate the relationship between interest rates and growth periods. Between 6% and 10% It is claimed to provide very accurate results for annual interest rates.

Okay, we understand the basics, but how does this rule work?

Step-by-step Let’s explain how it works:

1. First your interest You have to detect it. (Let’s say this rate is 6% for the rule of 72)
2. Later 72 at your interest rate. You have to divide. (72 ÷ 6 = 12)
3. The result you achieve (in our example it was 12) shows how many years it will take for your investment to double with an interest return of 6%. For example, if our interest rate was 8%, your money 9 years We would conclude that it would double (72 ÷ 8 = 9).

What about other interest rates?

Rule of 72, mainly Between 6% and 10% Interest rates are used.

To calculate rates outside this range, each time the interest rate deviates 3 points from the 8% threshold, depending on whether the deviation increases or decreases, Adding 1 to 72 It is possible to adjust the line to your interest rate by subtracting or deducting it.

For example, an annual compound interest rate of 11% is 3 percentage points higher than 8%. For this reason, adding 1 to 72 gives the same formula. 73 It must be applied by number.

If our interest rate were 14% instead of 11%, since this rate is 6 points higher than 8%, we would add 2 to 72 and use the formula: 74 We were going to implement it with!

Let’s do an experiment based on the interest rates in our country.

Let’s choose a random bank. Let this bank be İş Bankası. If we go to the İş Bank website, we see deposits between 5000 and 100,000 TL for a year or more. 34% interest It seems to have been implemented.

Since 34% is 26 basis points greater than 8%, if we do the necessary work (26 ÷ 3 = 8.66 ≈ 9), we get more than 72 9 additions We come to the conclusion that it is necessary.

Applying the formula in this way, we get the result 81 ÷ 34 = 2.38. So this formula is simple about two and a half years later It shows that the value of money will double.

Obviously this is just a simplified version of a complex formula to make this calculation easier and calculate the doubling time without deviation You must choose the complex formula Let us also remind you.

Moreover, this content It is not investment advice Let’s end our content by saying:

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