Thursday, October 16, 2008

Rule of 72: Albert Einstein's Greatest Discovery

Rule of 72: If you divide 72 by the interest rate on your debt or investment, the answer is approximately the number of periods to double the original quantity. For instance, if you were to invest $100 at 9% per year, then your investment would be worth $200 after 8 years. For further information, see Wikipedia rule of 72.

Credit Albert Einstein with discovering this rule. Albert Einstein called compound interest the most powerful force in the universe and characterized it as the greatest mathematical discovery of all time.

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