ReviewedEducational article · Updated Oct 2026
Key takeaways
- Years to double ≈ 72 ÷ annual percentage rate.
- It is a mental shortcut for compound growth, not an exact law.
- Accuracy is best for mid-range rates; very high or low rates drift more.
- You can also solve for the rate: rate ≈ 72 ÷ years.
The Rule of 72 is a back-of-the-envelope way to estimate how long money takes to double at a given compound rate — or what rate you need to double in a given number of years. It is popular because the division is easy and the answer is usually close enough for conversation.
How to use it
- Doubling time: years ≈ 72 ÷ rate(%). At 8%, about 9 years. At 6%, about 12 years.
- Required rate: rate(%) ≈ 72 ÷ years. To double in 10 years, you need about 7.2%.
The entire rule in one expression: divide 72 by the annual percentage rate to estimate years to double.
It is a napkin, not a spreadsheet — and that is exactly why it is useful.
Where it comes from
Exact doubling under continuous compounding involves the natural log of 2 (about 0.693). For annual compounding, the exact years to double are ln(2) / ln(1+r). The Rule of 72 is a convenient approximation that stays tidy with whole percentages. Variants like the Rule of 69.3 are closer for continuous compounding; 72 is friendlier for mental math.
When it drifts
Compare the rule with the exact annual-compounding answer:
- At 6%: rule ≈ 12.0 years; exact ≈ 11.9 — excellent.
- At 9%: rule ≈ 8.0; exact ≈ 8.0 — excellent.
- At 2%: rule ≈ 36; exact ≈ 35.0 — still fine for intuition.
- At 18%: rule ≈ 4.0; exact ≈ 4.2 — the gap grows.
For typical mid-single-digit to low-double-digit rates, the rule is surprisingly good. For very high rates, use the exact formula or a calculator.
Inflation twin: the same rule estimates how long it takes prices to double at a given inflation rate. At 3% inflation, purchasing power of a cash pile halves in roughly 24 years.
What the model leaves out
Taxes, fees and volatile returns all change real-world doubling paths. The Rule of 72 assumes a steady rate — perfect for teaching compounding, incomplete as a forecast.
This article is for general educational purposes only and is not financial advice. Examples use simplified, hypothetical numbers and ignore taxes, fees and personal circumstances. Consider speaking with a qualified professional before making financial decisions. See our full disclaimer.