What is the Rule of 72?
The Rule of 72 is a simple mental math shortcut that estimates how many years it takes to double your money at a fixed annual interest rate. Divide 72 by your annual rate, and you have your answer.
The Formula
Years to double = 72 ÷ annual interest rate
Examples
- 6% rate: 72 ÷ 6 = 12 years to double
- 8% rate: 72 ÷ 8 = 9 years to double
- 12% rate: 72 ÷ 12 = 6 years to double
How Accurate Is It?
The Rule of 72 is remarkably accurate for rates between 6% and 10%. At 8%, it predicts 9 years — the actual answer using the compound interest formula is 9.01 years.
Rule of 72 in Reverse
You can also use it to find the rate needed to double money in a target time: Rate = 72 ÷ years. To double in 8 years, you need a 9% annual return.
Applying It to Inflation
At 3% inflation, prices double in 72 ÷ 3 = 24 years. This is why investing matters — cash in a mattress loses half its purchasing power in two decades.
For precise calculations, use our compound interest calculator instead of the approximation.