Yugocean
Valued Contributor
The rules of 72 and 69.3 are mathematical ways to calculate the doubling time of your savings using the rate of interest.
Rule of 72
This rule is the simplest, in this the time is calculated by dividing 72 by the rate of interest. The formula is ( T = 72/r ) It is partially accurate but being simple it is most popular.
Rule of 69.3
This rule is based on the logarithmic function of 2 (0.69314), which translates to 69.3. In this, 1 has to be added and subtracted for every 3 digits of the interest rate. Apart from being complex, this rule has the limitation that it gives accurate information only up to 5% of the interest rate, for more than that the information is obtained from the E-M rule.
E-M Rule
Eckart–McHale second order is abbreviated as the E–M rule. This provides a multiplicative improvement of the rule of 69.3. In this, the result of Rule 69.3 is calculated from 200/(200−r). This can lead to predictions with accuracy at rates up to 20%.
Rule of 72
This rule is the simplest, in this the time is calculated by dividing 72 by the rate of interest. The formula is ( T = 72/r ) It is partially accurate but being simple it is most popular.
Rule of 69.3
This rule is based on the logarithmic function of 2 (0.69314), which translates to 69.3. In this, 1 has to be added and subtracted for every 3 digits of the interest rate. Apart from being complex, this rule has the limitation that it gives accurate information only up to 5% of the interest rate, for more than that the information is obtained from the E-M rule.
E-M Rule
Eckart–McHale second order is abbreviated as the E–M rule. This provides a multiplicative improvement of the rule of 69.3. In this, the result of Rule 69.3 is calculated from 200/(200−r). This can lead to predictions with accuracy at rates up to 20%.