Rule of 72

One of the best ways to illustrate compound interest is the rule of 72. It shows you how many years it would take you to double your money. Here is the Formula: 72/rate of return=years to double your money. For example, if the interest rate is 4%, it would take you 18 years to double your money. (72/4=18)

Look at the illustration here. The difference between P100,000 @ 4% versus 12% is P6,000,000. P6M is equal to 20 years salary of someone who earns P300,000 annually or P25,000 monthly.  

The Rule of 72 unveils the powerful impact of compound interest on money. It also reveals 2 types of people: People who don't understand how money works-they end up working for money. People who understand how money works- they let money work for them