The Rule of 72: how fast does money double?
Divide 72 by your annual return rate, and you get roughly how many years it takes your money to double. No calculator, no formula memorization — just quick mental math for gut-checking any return.
The doubling table
72 ÷ rate = years| Annual return | Years to double |
|---|---|
| 4% | 18.0 years |
| 5% | 14.4 years |
| 6% | 12.0 years |
| 7% | 10.3 years |
| 8% | 9.0 years |
| 10% | 7.2 years |
| 12% | 6.0 years |
The Rule of 72 is an approximation — it's most accurate for rates between roughly 6% and 10%, and drifts slightly at the extremes. Close enough for quick mental math, not for precise planning.
Where this is actually useful
real uses-
1
Sanity-checking an investment pitch
If someone claims an investment will "double your money in 3 years," that implies roughly a 24% annual return (72 ÷ 3). Ask yourself how realistic that actually is.
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2
Understanding debt just as easily
The same math works in reverse: a credit card balance at 24% APR that you don't pay down effectively doubles in about 3 years — the rule cuts both ways.
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3
Comparing inflation's bite
At 4% inflation, prices — and the erosion of cash sitting idle — roughly double every 18 years. It's a quick way to see why "just saving cash" loses ground over decades.
The honest caveat
read this part tooThe Rule of 72 assumes a constant annual return, which real investments never actually deliver — markets go up and down year to year, even if the long-run average is steady. Use it for quick estimates and intuition, not for exact retirement math.
This page is educational, not personalized financial advice. See our full before investing disclosures before acting on anything here.
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