Assume you put $2,000 into a tax-free investment and leave it there for 45 years at an annual rate of 8%.According to the Rule of 72,your investment will grow to a value of about $64,000.

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The Rule of 72 is a convenient formula used to estimate the number of years it takes for an investment to double in value. It is calculated by dividing 72 by the annual rate of return. In this case, 72 divided by 8 equals 9, meaning it will take approximately 9 years for the investment to double in value. Over 45 years, the investment would have doubled about 5 times (since 45 divided by 9 equals 5), resulting in a final value of approximately $64,000.

Assume You Put $2,000 into a Tax-Free Investment and Leave