Double your Savings Calculation

August 20, 2013 at 9:47 AM

There is a way you can calculate how long it would take to double your savings with a quick formula using the "Rule of 72".  The formula is 72 divided by % = years.  For example if you are receiving 5% on your savings, then you use the formula of 72 divided by 5 = 14.4 years.  This is an easy way to work out how quickly your savings will double.

Remember this rule works with your credit card balance also.  For example if the interest rate on your credit card is 18% then your debt on the credit card would double in 4 years (72 divided by 18 = 4 years).  So this Rule shows how important it is to repay your credit card first and then start savings, and how over time your savings compound.  So make your plan of action now.



Category: Tips on Planning

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