What Is the Rule of 72?
The Rule of 72 is a quick mental-math shortcut for estimating how long it takes an investment or debt to double in value at a fixed annual compound rate, without needing a calculator with logarithms on hand.
The Formula
The rule simply divides 72 by the annual interest rate: Years to double ≈ 72 / rate. For example, at an 8% annual return, money doubles in roughly 72 / 8 = 9 years. This calculator also shows the more precise doubling time using the exact logarithmic formula, ln(2) / ln(1 + r), for comparison.
Why It’s Useful (and Its Limits)
The Rule of 72 is remarkably accurate for interest rates roughly between 6% and 10%, and gets slightly less precise outside that range — which is why the exact figure is shown alongside it. It assumes a constant, uninterrupted compound rate and does not account for taxes, fees, inflation, or contributions.
- For general financial planning and educational purposes only.
- Actual investment returns vary and are not guaranteed.