The Rule of 72 is one of the most useful mental shortcuts in personal finance. It lets you estimate how long it will take to double your money — with nothing more than basic division.
The rule
Divide 72 by your annual interest rate to get the approximate number of years to double your money.
| Interest rate | Years to double |
|---|---|
| 2% | 36 years |
| 3% | 24 years |
| 4% | 18 years |
| 6% | 12 years |
| 8% | 9 years |
| 10% | 7.2 years |
| 12% | 6 years |
| 24% (credit card) | 3 years |
The actual formula using compound interest is: doubling time = log(2) / log(1 + r). The Rule of 72 approximates this remarkably well for rates between 2% and 15%.
Why 72?
It’s a mathematical approximation, but 72 is especially convenient because it divides evenly by 2, 3, 4, 6, 8, 9, 12, and 24 — covering almost every useful interest rate scenario.
Applications beyond investing
Credit card debt: Credit card debt at 24% APR doubles in 72 ÷ 24 = 3 years. A $5,000 balance that you make minimum payments on becomes $10,000 in 3 years of inaction.
Inflation: At 3% inflation, purchasing power halves in 72 ÷ 3 = 24 years. Money sitting in a 0.5% savings account loses half its real value in about 48 years — well within a working lifetime.
Economic growth: A country’s economy growing at 2% per year will double in 36 years. At 7%, it doubles every 10 years.
Population growth: The same rule applies to any exponential growth.
The Rule of 72 vs. the Rule of 69
For very high or very low rates (outside the 2-15% range), the Rule of 69 (or 70) is slightly more accurate because the true formula uses ln(2) ≈ 0.693. But 72 divides more cleanly and is accurate enough for most practical purposes.
A practical example
You invest $10,000 in an S&P 500 index fund averaging 10% per year:
- After one doubling (7.2 years): $20,000
- After two doublings (14.4 years): $40,000
- After three doublings (21.6 years): $80,000
- After four doublings (28.8 years): $160,000
- After five doublings (36 years): $320,000
Your $10,000 grew to $320,000 over 36 years with no additional contributions — just time and compounding. This illustrates why starting early is so powerful.
The reverse: Rule of 72 for halving
You can also use it in reverse: “at 3% inflation, in how many years does my money lose half its purchasing power?” 72 ÷ 3 = 24 years.
This reframes why keeping large cash balances long-term is risky — not because cash can lose value overnight, but because inflation steadily erodes it.
Put the numbers to work
Use our Compound Interest Calculator to see the exact doubling time for any scenario — and verify the Rule of 72 against the real math. You’ll find it’s remarkably accurate for everyday planning.