There is a very important concept in fund investment, which is called the eighth wonder of the world. We also pursue the effect of compound interest in fund investment, but the formula of compound interest is very troublesome. If the annual income is X%, then the income after n years is the n power of (1-X%). If there is no calculator, it is basically impossible to calculate.

Is there a simple way to quickly calculate the compound interest of a fund without using a calculator?

Of course there is. Here we share an ultra-simple compound interest algorithm called Rule 72, but the algorithm provides an approximate algorithm, not an accurate value, which can help us determine the investment goal. Given the rate of return, how many years will it take, double your fund investment, and give the result in minutes with 72 algorithm.

For example:

Assuming that the annual income is 6%, then 72÷6= 12 years, which is about 12 years, can double the investment funds. If we use the standard compound interest formula, the result is.

Assuming that the annual income 10%, then 72÷ 10= years, that is, about years, we can double the investment funds. If the standard compound interest formula is used, the result is years.

That is to say, if the annual income is X%, then the year when the funds need to be doubled is (72÷X), which is the so-called 72 rule.

Through this algorithm, we can easily know when our funds can double.

If the annual income is 12%, then the year of doubling the capital is 6 years, while if it is to quadruple the capital, it will take 12 years, quadruple it 18 years, and so on.

Or we can use the 1 15 algorithm, which is the time required to triple the capital, similar to the calculation of the 72 algorithm. Using115÷xis the approximate time required to triple the principal. The error between the standard calculation formula and the simple algorithm is not big, which is completely enough to estimate.