What Is the Rule of 72?
The Rule of 72 is a simple mental math formula that estimates how long it takes for an investment to double in value. Divide 72 by your annual interest rate, and the result is the approximate number of years to double your money.
Years to Double = 72 ÷ Annual Interest Rate
Examples: At 6% return, your money doubles in 12 years (72 ÷ 6). At 9%, it doubles in 8 years. At 12%, it doubles in 6 years.
Why 72?
The mathematically precise number is 69.3 (derived from the natural logarithm of 2). However, 72 is used because it is divisible by many common interest rates: 1, 2, 3, 4, 6, 8, 9, 12, 18, and 24. This makes mental math much easier. For rates between 4% and 12%, the Rule of 72 is accurate to within 1% of the exact answer.
Using the Rule of 72 for Debt
The Rule of 72 also shows how quickly debt doubles. A credit card charging 24% APR will double your balance in just 3 years if you make no payments. A student loan at 6% doubles in 12 years. This perspective often motivates faster debt repayment.
Using the Rule of 72 for Inflation
At 3% inflation, prices double in 24 years. At 6% inflation, prices double in just 12 years. This is why maintaining investments that outpace inflation is critical for long-term wealth preservation.
Limitations of the Rule of 72
The Rule of 72 is an approximation. It works best for rates between 4% and 12%. For very high rates (above 20%) or very low rates (below 2%), the exact logarithmic formula is more accurate. Use our Rule of 72 Calculator for precise calculations at any rate.