The Rule of 72: divide 72 by your annual returnto get the years it takes money to double. Earning 8%? 72 ÷ 8 = 9 years. Earning 6%? 72 ÷ 6 = 12 years. It's the fastest way to feel what a rate actually means for your future balance.
How accurate is it, exactly?
| Annual return | Rule of 72 says | Exact doubling time | Error |
|---|---|---|---|
| 2% | 36.0 yrs | 35.0 yrs | +1.0 yr |
| 4% | 18.0 yrs | 17.7 yrs | +0.3 yr |
| 6% | 12.0 yrs | 11.9 yrs | +0.1 yr |
| 8% | 9.0 yrs | 9.0 yrs | ≈0 |
| 10% | 7.2 yrs | 7.3 yrs | −0.1 yr |
| 12% | 6.0 yrs | 6.1 yrs | −0.1 yr |
In the 6–10% range — where long-run stock returns and many planning assumptions live — the rule is accurate to within about a month. It drifts at very low rates (overestimates) and very high rates (underestimates), but never badly enough to change a decision.
Why it works
Doubling requires your growth factor (1 + r)t to reach 2, so the exact answer is t = ln(2) ÷ ln(1 + r). For small r, ln(1 + r) ≈ r, giving t ≈ 69.3 ÷ rate. The number 72 is used instead of 69.3 because it divides cleanly by 2, 3, 4, 6, 8, 9, and 12 — and its slight overshoot conveniently cancels the approximation error at everyday rates.
What doubling time really buys you
- At 7% (doubling ~every 10 years), $25,000 at age 30 is ~$200,000 at 60 — three doublings, 8×.
- At 4.5% (a good HYSA; doubles every ~16 years), the same money reaches ~$93,000 — less than half.
- Inverted, the rule prices inflation: at 3% inflation, 72 ÷ 3 = 24 years for prices to double — i.e., for cash under a mattress to lose half its purchasing power.
See your own doubling time move in real-time — the compound interest calculator shows a live Rule of 72 readout and a doubling chart, and compound vs simple interest shows why doubling only happens when interest earns interest.