Rule of 72
A simple mental formula to estimate how long it takes for money to double at a fixed rate of return.
The Formula
Estimate the number of years for money to double:
Years to Double = 72 ÷ Annual Rate of Return (%)
Assumes annual compounding. Accuracy is best for moderate rates (≈ 4%–15%).
Rule of 72 Calculator
Tip: change either field. Rate → Years uses 72 ÷ rate. Years → Rate uses 72 ÷ years.
Quick Reference Table
| Rate % | Years to Double | Rate % | Years to Double |
|---|
Calculated via 72 ÷ rate. Exact compound-interest results differ slightly.
FAQ
What is the Rule of 72?
A quick mental shortcut: divide 72 by an annual return rate (in %) to estimate the years it takes to double your money. Example: 72 ÷ 8% ≈ 9 years.
How accurate is the Rule of 72?
It is an approximation that works best for moderate rates (roughly 4%–15%). Accuracy declines at very high or very low rates and depends on compounding frequency.
Why 72 and not 70?
72 has many small factors (2, 3, 4, 6, 8, 9, 12), making mental division easy. It also fits compound-interest math well around common rates.
Does the Rule of 72 assume annual compounding?
Yes. With more frequent compounding (monthly/quarterly) the true doubling time is slightly shorter.
Can I use the Rule of 72 for inflation?
Yes. Divide 72 by the inflation rate to estimate how long it takes for purchasing power to halve. Example: 72 ÷ 3% ≈ 24 years.