What the Rule of 72 is
The Rule of 72 is a famous shortcut for estimating how long an investment takes to double at a fixed annual return: years to double = 72 ÷ annual return rate. Divide 72 by the percentage rate and you get the approximate number of years. It works because of the math of compounding, and it is accurate enough for quick mental estimates without a calculator. A return of 0% never doubles, so the rate must be positive. The shortcut approximates what the compound interest calculator works out exactly.
How to use this calculator
Enter the annual return rate you expect as a percentage. The tool returns the estimated number of years for your money to double. You can also flip it: to double your money in a target number of years, divide 72 by that number to find the rate you need. For the exact compounding behind the rule, see the inflation calculator, which uses the same exponential formula. If you know the start and end values instead of the rate, use the CAGR calculator.
Worked example and accuracy
At an 8% return: 72 ÷ 8 = 9 years to double. The rule is most accurate for rates between about 6% and 10%; outside that band it drifts slightly from the exact figure:
| Annual return | Rule of 72 | Exact |
|---|---|---|
| 4% | 18.0 yrs | 17.7 yrs |
| 8% | 9.0 yrs | 9.0 yrs |
| 12% | 6.0 yrs | 6.1 yrs |
These figures are an estimate for general information only and are not financial advice; consult a qualified professional before making money decisions. For a precise balance at any future date, the future value calculator is the one to use.
Frequently asked questions
- How does the Rule of 72 work?
- Divide 72 by your annual return rate to estimate the years it takes to double your money. At 8%, that is 72 ÷ 8 = 9 years.
- How long to double money at 8%?
- About 9 years, using the Rule of 72: 72 ÷ 8 = 9. The exact figure is also very close to 9 years at this rate.
- How accurate is the Rule of 72?
- It is a close approximation, most accurate for returns between about 6% and 10%. For very high or low rates it drifts a little from the exact answer.
- Can I use it to find the rate I need?
- Yes. Divide 72 by the number of years in which you want to double your money. To double in 6 years, you need about a 12% annual return.
- What if the return is zero or negative?
- The rule does not apply: money earning 0% never doubles, and a negative return shrinks the balance instead. Enter a positive rate. To see how fast inflation halves your purchasing power, divide 72 by the inflation rate instead.