Rule of 72
Divide 72 by an annual return rate to estimate how many years it takes money to double.
What You Need to Know
The Rule of 72 is a mental math shortcut for compound growth. Divide 72 by the annual rate of return to estimate doubling time.
Why it works: 72 is close to ln(2) × 100 (≈69.3) and has many divisors, making quick calculations easy.
Accuracy: Most precise for returns between 6% and 10%. For very low or high rates, use the exact logarithmic formula.
Related shortcuts:
- Rule of 69 (continuous compounding)
- Rule of 70 (inflation or population growth)
- Rule of 114 (tripling time)
- Rule of 144 (quadrupling time)
Sources & References
This information is sourced from authoritative government and academic institutions:
- investor.gov
https://www.investor.gov/introduction-investing/investing-basics/glossary/rule-72
Related Calculators & Tools
Put your knowledge into action with these interactive tools:
Rule of 72 Calculator
Estimate doubling time or required return instantly using the Rule of 72 mental math shortcut with accuracy analysis
Rule of 72 Template
Customize Rule of 72 scenarios with different growth assumptions, comparison benchmarks, and downloadable results.