What Is the Rule of 72? How to Use It
The Rule of 72 is a simple mental math trick to estimate how long it takes to double your money. Learn when it works and how accurate it is.
Guide overview
A simple mental math trick investors have used for centuries to estimate doubling time.
The Rule of 72 is a simple mental math trick to estimate how long it takes to double your money. Learn when it works and how accurate it is.
Key points from the source guide
The source guide explains the shortcut: years to double equals 72 divided by annual return percent.
It describes where the approximation is accurate and when a more precise calculator is better.
It also reverses the formula to estimate the annual return needed for a target doubling time.
Try the related Toolars calculators
This migrated guide links to these Toolars tools: rule-of-72, compound-interest.
Tools mentioned in this article
Frequently asked questions
- Does the Rule of 72 work for any investment?
- It works for anything that compounds: savings accounts, bonds, stocks, GDP growth, and inflation. It is an approximation, but accurate enough for quick mental math across most realistic return ranges.
- Why 72 and not a round number?
- 72 is divisible by many numbers, making mental math easy. For very low rates, 70 is slightly more accurate. For high rates, 69.3 is mathematically precise.