Rule of 72 Calculator

Estimate the time required to double your investment.

A quick, useful formula that is used to estimate the number of years required to double the invested money at a given annual rate of return.

What is the Rule of 72?

The Rule of 72 is a quick, useful formula used to estimate the number of years required to double your money at a given annual rate of return. It is a mental math shortcut that bypasses complex compound interest formulas while remaining remarkably accurate for average interest rates.

Finance students and investors use it to quickly compare different investment opportunities or to visualize the impact of inflation over time.

How to Use the Rule

The formula is incredibly simple:

► Years to Double = 72 / Annual Interest Rate

Note: You use the whole number for the interest rate (e.g., use "8" for 8%, not "0.08").

Speed Comparison Examples

2% Return: It takes 36 years to double ($72 / 2$).
6% Return: It takes 12 years to double ($72 / 6$).
9% Return: It takes 8 years to double ($72 / 9$).
12% Return: It takes only 6 years to double ($72 / 12$).

Why "72"?

The number 72 is chosen because it has many divisors (2, 3, 4, 6, 8, 9, 12), making it easy to calculate in your head. Mathematically, the more precise number for natural log calculations is closer to 69.3, but 72 provides a more practical balance for mental estimation.

Applications of the Rule

Investment Growth: Estimating how long it will take for your retirement fund to double.
Impact of Inflation: Estimating how long it will take for the "cost of living" to double. If inflation is 3%, prices will double in about 24 years.
Credit Card Debt: Seeing how quickly your debt could double if you aren't making payments.
GDP Growth: Economists use it to estimate how long it will take for a country's economy to double in size.

Important Considerations

Compound Interest: The rule assumes that interest is compounded annually and that the rate remains fixed.
Accuracy Range: The rule is most accurate for interest rates between 5% and 15%. For extremely high or low rates, the "Rule of 69" or "Rule of 70" might be slightly more precise.
Estimates Only: Always use a full compound interest calculator for precise financial planning.

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