The Rule of 72, Explained

How long will it take your money to double? Without a spreadsheet, the Rule of 72 gives a shockingly good estimate in your head.

The Rule

At 8% per year: 72 ÷ 8 = 9 years. At 12%: 72 ÷ 12 = 6 years. At 6%: 12 years. It also works in reverse — if you want to double in 9 years, you need 72 ÷ 9 = 8%.

Why Does It Work?

Doubling at rate r satisfies (1 + r)ᵗ = 2, so the exact answer is t = ln(2) / ln(1 + r). Since ln(2) ≈ 0.693 and ln(1 + r) ≈ r for small rates, the true "Rule of 69.3" becomes the rounder 72 once you account for continuous compounding and the tiny curvature of the logarithm. The number 72 was chosen because it divides evenly by 2, 3, 4, 6, 8, 9, 12 and 18 — convenient for mental math.

How Accurate Is It?

Within the 6%–10% range the Rule of 72 is accurate to within a few months. At 4% it says 18 years (real answer ≈ 17.7); at 20% it says 3.6 years (real answer ≈ 3.8). Only at extreme rates does it drift meaningfully — and those rates are rare in real investments.

Three Uses Beyond Investing

• Inflation — divide 72 by the inflation rate to see how long before your money's purchasing power halves. At 3% inflation, that's 24 years.
• Fees — a 1% annual fee halves your real returns' timeline; a 2% fee every ~36 years erases half your spending power.
• Goals — flip it to find the rate you need to hit a target in a set number of years.

Plug in any rate or timeframe with our Rule of 72 Calculator, or model the full growth curve with the Compound Interest Calculator.