New Delhi, Sept. 19 -- The 'Rule of 72' is a simple yet effective personal finance shortcut that can help an investor to roughly estimate how long an investment may take to double. It is particularly helpful when you compare different rates of return without performing a detailed compound-interest formula-based calculation.

The rule simply works by dividing 72 by the annual rate of return. For example, at an assumed annual return of 10%, Rs.1 lakh would take about 7.2 years to become Rs.2 lakh. Along similar lines, at an assumed return of 8%, Rs.1 lakh would take roughly 9 years to turn into Rs.2 lakh. In both cases, 72 is divided by the annual rate of return, i.e., 10% and 8%, respectively.

This write-up discusses this rule in detail, ...