Question:
❓If you invest $5,000 and it earns an average of 7% per year, about how long will it take to double?
A) 5 years
B) 7 years
C) 10 years
D) 14 years
Answer:
✅ B) 7 years
Here’s why:
That’s the “Rule of 72” in action—you divide 72 by your annual rate of return to estimate how long it takes to double your money.
At 7%, 72 ÷ 7 = just over 10 years in simple math, but with compounding it’s closer to 7 years in real life.
Why it matters:
Knowing how quickly your money can grow helps you set realistic goals and choose investments that actually get you there.
The earlier you start, the more those doubling periods can work in your favor—because compounding isn’t magic, but it can feel like it when you give it enough time.
