When the money is loaned or borrowed for a longer time period, if the interest is paid (or charged) not only on the principle, but also on the past interest, then we say the interest is compounded. Th...When the money is loaned or borrowed for a longer time period, if the interest is paid (or charged) not only on the principle, but also on the past interest, then we say the interest is compounded. The formula for the rule of 72 is expressed as the unknown (the required amount of time to double a value) calculated by taking the number 72 and dividing it by the known interest rate or growth rate.
