The rule of 72 is a mental-math shortcut: divide 72 by your annual rate of return to estimate how many years it takes an investment to double. At 6%, 72 ÷ 6 = 12 years.
Doubling times
| Annual rate | Rule of 72 estimate | Exact (annual compounding) |
|---|---|---|
| 2% | 36 years | 35.0 years |
| 3% | 24 years | 23.4 years |
| 4% | 18 years | 17.7 years |
| 6% | 12 years | 11.9 years |
| 8% | 9 years | 9.0 years |
| 10% | 7.2 years | 7.3 years |
| 12% | 6 years | 6.1 years |
Other ways to use it
- Find the rate you need: to double in 10 years you need about 72 ÷ 10 = 7.2% a year.
- Inflation: at 3% inflation, prices double in about 24 years, halving your money's buying power.
- Debt: an unpaid balance at 24% doubles in about 3 years.
Its limits
The rule is most accurate between about 6% and 10%. For very low or high rates, or continuous compounding, 69 or 70 can be more accurate. For exact answers, use the calculator.
Frequently asked questions
How accurate is the rule of 72?
Within a few months for typical rates of 4% to 12%. It's an estimate, not an exact figure.
Why 72?
It's close to the mathematically exact value (about 69.3 for continuous compounding) and divides evenly by many common rates.