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 Calculator - Free Online
Calculate your rule of 72 template with our free online tool. Get accurate results instantly. No signup required.