Rule of 72
Divide 72 by your rate of return and you know almost instantly how long it takes your money to double — no calculator, spreadsheet, or exponent required.
What Is It
The Rule of 72 is a mental-math shortcut for estimating how many years it takes an investment to double at a given annual rate of return: divide 72 by the rate, and the result is roughly the number of years to double. It's an approximation of the real exponential math behind Compound Interest, not a replacement for it — the number 72 was chosen because it divides evenly by so many common rates (6, 8, 9, 12), which makes it fast to use without a calculator.
Why It Matters
Compounding is exponential, which makes it genuinely hard to eyeball — most people can't mentally solve "how long until this doubles at 7%" from the raw formula. The Rule of 72 turns that into a division problem simple enough to do in your head, which makes it useful for quickly sanity-checking a rate of return or comparing two accounts without opening a calculator at all. It's an estimate, not an exact figure — it drifts slightly at very high or very low rates, but it stays close enough at the rates most portfolios actually target.
Quick Example
At a 7% annual return, 72 ÷ 7 ≈ 10.3 years to double — close to the exact answer of about 10.2 years. At a more conservative 4% return, that stretches to 72 ÷ 4 = 18 years to double. The same $10,000 doubles almost four times over 40 years at 7% (to about $150,000) but only doubles a little over twice at 4% (to about $48,000) — the rule makes that gap visible in seconds, without running either number through a full compound interest formula.
Try It Yourself
The Compound Interest Calculator surfaces this exact doubling-time estimate automatically for whatever rate you enter — plug in your own numbers to see it applied to your timeline.
📈Compound Interest Calculator
See how your money grows over time — including how long it takes to double at your rate.