High Interest Investment

investment in a junk bond earning 8.6% per year interest. how many years will it take to double my money?

Public Comments

1. The Rule of 72 says a little over eight years (72 divided by 8.6%). Unfortunately, there's another component at work here. That is, what the underlying principal (the bond's value) is worth when you redeem it. If, for example, you sell the bond in 10 years - and assuming it doesn't default - your total return on your investment will be based on the interest you earned while you owned the bond, plus the principal you receive when you redeem it, which could be more or less than your original cost. Hope that helps. Disclaimer. The information in this response is for general purposes only, and shall not be construed as specific advice for any individual. The questioner is urged to contact their own professional advisors before implementing any tax or investment strategy.