# Question: How long will it take for a certain amount to double if it is invested at 5% compounded annually?

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For example if you wanted to double an investment in 5 years, divide 72 by 5 to learn that you’ll need to earn 14.4% interest annually on your investment for 5 years: 14.4 × 5 = 72. The Rule of 72 is a simplified version of the more involved compound interest calculation.

## How do you calculate doubling time of an investment?

The rule is a shortcut, or back-of-the-envelope, calculation to determine the amount of time for an investment to double in value. The simple calculation is dividing 72 by the annual interest rate.

## How long will it take money to double if it is invested at 5 compounded annually?

Or, if your money is earning a 5 percent interest rate, you’ll double it in 14.4 years (72 divided by 5 equals 14.4). If your money is earning a measly 1 percent interest rate, it will take you—yep, you guessed it—a whopping 72 years to double it.

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## How long does it take for an investment to double in value if it is invested at 13% compounded monthly?

13 = 5.33 years and ln(2)/. 15 = 4.62 years.

## How long will it take an investment to double in value using the Rule of 72 if its earn 2% 5% 10%?

How the Rule of 72 Works. For example, the Rule of 72 states that \$1 invested at an annual fixed interest rate of 10% would take 7.2 years ((72/10) = 7.2) to grow to \$2. In reality, a 10% investment will take 7.3 years to double ((1.107.3 = 2). The Rule of 72 is reasonably accurate for low rates of return.

## What is the doubling formula?

Doubling time formula

doubling time = log(2) / log(1 + increase) , where: increase is the constant growth rate expressed as a percentage value, doubling time is the time needed for the quantity to double in value for a specified constant growth rate.

## How many years will it take your investment to double with 2% interest rate?

For example, with a 9% rate of return, the simple calculation returns a time to double of eight years. If you use the logarithmic formula, the answer is 8.04 years—a negligible difference. In contrast, if you have a 2% rate of return, your Rule of 72 calculation returns a time to double of 36 years.

## How long will it take \$500 to double at a simple interest rate of 5%?

It’ll take 24 years for your investment to double.

## How long will it take \$1000 to double at 6 interest?

It will double faster. 151.57 months = 12.63 years.

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## Can I double my money in 5 years?

Let’s apply Thumb rule in a reverse way, if you wish to double your money say in 5 years, then you will have to invest money at the rate of 72/5 = 14.40% p.a. to achieve your target. This means you have to invest money in those financial products that will give you a return at 14.40% per annum. 