The Rule of 72 is the most useful piece of financial math you can hold in your head. Divide 72 by an annual growth rate, and you get the approximate number of years for the principal to double.
The Rule
Years to double ≈ 72 / annual rate (in percent)
- 4% → 18 years
- 6% → 12 years
- 8% → 9 years
- 10% → 7.2 years
- 12% → 6 years
Why 72?
72 is chosen because it has a lot of small divisors (1, 2, 3, 4, 6, 8, 9, 12), making mental division easy. The exact mathematical answer is ln(2) / ln(1+r) ≈ 0.693 / r — and 72 is a clean approximation.
How Accurate Is It?
It's most accurate between 5% and 10% rates. Outside that band, the actual doubling time drifts:
- At 2%, real doubling = 35 years; Rule of 72 says 36. Off by 1.
- At 8%, real doubling = 9.0 years; Rule of 72 says 9. Off by 0.
- At 15%, real doubling = 4.96 years; Rule of 72 says 4.8. Off by 0.2.
For most personal-finance use cases this is plenty good.
A More Accurate Variation
For continuously compounded growth, the Rule of 69.3 is exact: ln(2) × 100 ≈ 69.3. For daily compounding, 70 is closer. For annual compounding at typical rates, 72 wins.
Practical Uses
- Quick retirement math: "At 7%, my savings double every ~10 years."
- Mortgage cost intuition: "At 6% interest, a 30-year mortgage means the lender's money doubles roughly twice during the loan."
- Inflation impact: "At 3% inflation, prices double every 24 years."
Verify with the Tools
The rule is an approximation. For real decisions, use our Compound Interest Calculator or CAGR Calculator — they give exact answers in seconds.
Bottom Line
72 / rate = doubling years. It's good enough for back-of-envelope work and a great way to internalize compound growth.
Run the numbers yourself
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