How to Double Your Money in Five Years
- 1). Discover the Rule of 72. This is a principle that investors use to calculate how long it will take for a sum of money to double.
- 2). Apply the Rule of 72. To do this, divide 72 by an interest rate. The answer will be how many years it will take money to double if earning that interest rate. For example, if you divide 72 by 12 (to represent 12 percent interest) the answer will be 6. It will take 6 years for money to double if earning 12 % annually compounded interest.
- 3). Calculate how much interest you would need to earn to double your money in 5 years. To do this, divide 72 by 5. The answer is 14.4. You would need to earn 14.4% annually compounded interest for your money to double in 5 years.
