The Rule of 72 is a mental math shortcut for estimating how long it takes an investment to double at a given annual return. Divide 72 by the annual interest rate and you get the approximate number of years to double your money.
The Formula
Years to double = 72 ÷ Annual Rate of Return (%). At 6% annual return: 72 ÷ 6 = 12 years. At 9%: 72 ÷ 9 = 8 years. At 12%: 72 ÷ 12 = 6 years. Simple division gives you a remarkably accurate estimate.
Quick Reference Table
- 2% return → 36 years to double (typical high-yield savings)
- 4% return → 18 years to double
- 6% return → 12 years to double
- 8% return → 9 years to double (near historic stock market average after inflation)
- 10% return → 7.2 years to double
- 12% return → 6 years to double
- 24% return → 3 years to double (credit card APR working against you)
The Rule in Reverse: How Debt Doubles
The Rule of 72 applies to debt just as well as investments. A credit card charging 24% APR doubles your balance in 72 ÷ 24 = 3 years if you make no payments. A student loan at 6% doubles in 12 years. This makes the rule a powerful way to visualize the urgency of paying off high-interest debt.
Why 72 and Not 70 or 75?
72 is chosen because it has many integer factors (1, 2, 3, 4, 6, 8, 9, 12, 18, 24, 36, 72), making mental math easy. The rule is most accurate for rates between 6% and 10%. At very high or very low rates, dividing by 70 or 69.3 gives a slightly more accurate result.
Use the Rule of 72 to quickly compare investment options. An investment returning 8% doubles in 9 years; one returning 4% takes 18 years. The gap compounds over a 30-year horizon.
