Rule of 72 Calculator
Rule of 72 Calculator
The Rule of 72 is a quick mental-math shortcut: divide 72 by the annual interest rate to estimate how many years it takes for an investment to double. It's remarkably accurate for rates between roughly 6% and 10%, and a handy way to build intuition about compounding without a calculator.
Investors use this to quickly gauge the power of different return rates — the difference between a 4% and 8% return isn't just "twice as fast," it's the difference between 18 years and 9 years to double an investment.
- Quick Mental Math: Years to double ≈ 72 ÷ rate — no calculator needed for a rough estimate.
- Most Accurate Near 8%: The approximation is closest to the exact answer for rates in the 6-10% range; it drifts more at very low or very high rates.
- Exact Formula Included: Years = ln(2) / ln(1 + rate) gives the precise answer for any rate.
Why 72 specifically?
72 has many small divisors (1, 2, 3, 4, 6, 8, 9, 12...), making it easy to divide by common interest rates mentally, and it happens to approximate ln(2)×100 closely across typical rates.
Does the Rule of 72 work for high inflation or very high rates?
It becomes less accurate outside the roughly 6-10% range — for very high rates, some use the "Rule of 69.3" or "Rule of 70" instead, or just use the exact formula shown here.
Rule of 72 Calculator
The Rule of 72 is a quick mental-math shortcut: divide 72 by the annual interest rate to estimate how many years it takes for an investment to double. It's remarkably accurate for rates between roughly 6% and 10%, and a handy way to build intuition about compounding without a calculator.
Investors use this to quickly gauge the power of different return rates — the difference between a 4% and 8% return isn't just "twice as fast," it's the difference between 18 years and 9 years to double an investment.
- Quick Mental Math: Years to double ≈ 72 ÷ rate — no calculator needed for a rough estimate.
- Most Accurate Near 8%: The approximation is closest to the exact answer for rates in the 6-10% range; it drifts more at very low or very high rates.
- Exact Formula Included: Years = ln(2) / ln(1 + rate) gives the precise answer for any rate.
Why 72 specifically?
72 has many small divisors (1, 2, 3, 4, 6, 8, 9, 12...), making it easy to divide by common interest rates mentally, and it happens to approximate ln(2)×100 closely across typical rates.
Does the Rule of 72 work for high inflation or very high rates?
It becomes less accurate outside the roughly 6-10% range — for very high rates, some use the "Rule of 69.3" or "Rule of 70" instead, or just use the exact formula shown here.