Level 4 · ages 16–18OECD RRInvest
Advanced compounding & the power of time
🎯 Goal: Use the compound formula and the "Rule of 72" to estimate years to double.
Compounding: Future = Principal × (1+rate)^years. The Rule of 72: years to double ≈ 72 ÷ rate(%).
Let’s explore
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Interest joins the principal and earns more — stronger over time.
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Rule of 72: 8%/year → 72 ÷ 8 = 9 years to double.
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Higher rate or longer time → doubles sooner.
Practice activity
🔬 At 6%/year, about how many years to double (Rule of 72)?
Worked example: At 6%/year: 72 ÷ 6 = 12 years to double. At 12%/year, just 6 years. Double the rate → half the doubling time.
Quick quiz
1. The compound formula?
→ Principal × (1+rate)^years
2. The Rule of 72 estimates?
→ Years to double money
3. At 8%/year, money doubles in ~?
→ 9 years
4. At 6%/year, money doubles in ~?
→ 12 years
5. A higher rate means doubling is?
→ Faster
6. What makes compounding strongest?
→ Long time + early start
🎯 Real-life mission
Use the Rule of 72 with two rates and compare doubling times.
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