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November 29, 2006

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This is a dumb question, but financial advisors say that your investments will double based on a certain calculation. Does that calculation assume that you'll continue investing the same amount, or is it based only on the amount used in the equation?

Thanks!

I'm assuming you're talking about the "rule of 72" (read more about it here: http://www.freemoneyfinance.com/2005/10/rule_of_72.html). It assumes NO additional investment -- it's simply the amount of time it takes your money to double (by itself) at a given rate of return.

Thanks for the quick response!

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