Rule of 72

The Rule of 72 is a mental math shortcut for estimating how many years it takes an investment to double in value at a given annual compound interest rate. Divide 72 by the interest rate (as a whole number, not a decimal), and the result approximates the doubling time in years.

It's meant for quick estimation, not precision, useful for comparing investment options or debt at a glance without running an exact compounding calculation. The Compound Interest Calculator gives the exact figure when precision matters more than speed.

Years to Double ≈ 72 / Annual Interest Rate (%)

An investment earning 8% annually:

• Years to double: 72 / 8 = 9 years

The exact calculation using compound interest math gives approximately 9.006 years, close enough for quick mental estimation, though not exact.

• Most accurate between roughly 6% and 10%. Outside this range, the approximation error grows larger, though it's still useful as a rough gut check.
• Works for debt as well as investments. Credit card debt at 24% APR doubles in about 3 years (72/24) if left unpaid and compounding, a useful mental model for understanding how fast debt can spiral.
• Assumes compound interest, not simple interest. The shortcut only works for compounding growth, it doesn't apply to interest that accrues linearly without reinvestment.
• 72's divisibility makes it convenient for mental math. Numbers like 70 or 69.3 are mathematically more precise in certain contexts, but 72 divides cleanly by more common rates, which is why it stuck as the standard shortcut.
• A good starting point for comparisons, not a substitute for exact modeling. Use it to quickly compare two rates, then switch to a full calculator once you need an actual number for planning.