Rule of 72 Calculator

Rule of 72 Calculator: The Magic Number

The Rule of 72 is a simple, famous mental math shortcut used by investors to estimate how long it will take for an investment to double in value given a fixed annual rate of interest. No complex spreadsheets required—just basic division.

How It Works

Years to Double = 72 ÷ Interest Rate

For example, if you have an investment that earns a 9% annual return:
72 ÷ 9 = 8 years to double your money.

Accuracy and Limitations

The Rule of 72 is an approximation. It is remarkably accurate for interest rates between 6% and 10%.

Low Rates (0-5%): The rule slightly underestimates the time (Rule of 69.3 is more accurate).
High Rates (20%+): The rule becomes less precise, but still offers a good ballpark figure.

Applying the Rule

Investing

If you want your savings to double in 10 years, you know you need to find an investment that returns at least 7.2% annually (72 ÷ 10).

Inflation

It works for expenses too. If inflation is 4%, the cost of living will double in 18 years (72 ÷ 4). This helps in retirement planning.

Frequently Asked Questions

Where does the number 72 come from?

It comes from the natural logarithm of 2, which is approximately 0.693. 72 is used because it is close to 69.3 but has many more divisors (2, 3, 4, 6, 8, 9, 12), making mental math much easier.

What about tripling my money?

For tripling, use the Rule of 115. Divide 115 by the interest rate to see how long it takes to triple.