The Rule of 72

Master the simple yet powerful formula that helps you quickly calculate how long it takes for your money to double at any given interest rate.

The Simple Formula

Years to Double = 72 ÷ Interest Rate
Example: 72 ÷ 8% = 9 years
2% Interest Rate
36 Years
72 ÷ 2 = 36
4% Interest Rate
18 Years
72 ÷ 4 = 18
8% Interest Rate
9 Years
72 ÷ 8 = 9
10% Interest Rate
7.2 Years
72 ÷ 10 = 7.2

Interactive Rule of 72 Calculator

Interactive Money Growth Visualization

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Real-World Applications

Investment Planning

Scenario: Retirement Savings
If you invest $50,000 at 8% annual return, your money will double to $100,000 in exactly 9 years (72 ÷ 8 = 9).
Quick Comparison
4% return: 18 years to double
8% return: 9 years to double
4% difference = 9 years faster!

Debt Analysis

Credit Card Debt
At 18% APR, unpaid debt doubles in just 4 years (72 ÷ 18 = 4). A $5,000 balance becomes $10,000 if only minimum payments are made.
Warning Signs
High-interest debt grows exponentially. Use the Rule of 72 to understand the urgency of paying off high-rate debt quickly.

The Rule of 72 Over a Lifetime

The Rule of 72: Divide 72 by the interest rate to estimate the number of years it will take for your money to double.

4%

Money Doubles Every 18 Years

72 ÷ 4 = 18 years

Age 29
$10,000
Age 47
$20,000
Age 65
$40,000
8%

Money Doubles Every 9 Years

72 ÷ 8 = 9 years

Age 29
$10,000
Age 38
$20,000
Age 47
$40,000
Age 56
$80,000
Age 65
$160,000

The Dramatic Difference

$40,000
4% return by age 65
$160,000
8% return by age 65

That's 4x more money with just 4% higher returns!

*The above hypothetical examples are for illustrative purposes only and do not represent any particular investment vehicle.

The Rule of 72 is a mathematical concept that approximates the number of years it would take to double the principal at a constant rate of return.

The performance of investments fluctuate over time, and as a result, the actual time it will take an investment to double in value cannot be predicted with any certainty.

Key Takeaways

Quick Mental Math

No calculator needed! Divide 72 by your interest rate for instant results.

Time is Money

Small differences in interest rates create huge differences in doubling time.

Investment Decisions

Compare investments quickly by seeing how long each takes to double your money.

Debt Awareness

Understand how quickly high-interest debt can grow out of control.

Related Concepts

Market Loss Recovery

Learn why a 50% loss requires 100% gain to recover and how this impacts your wealth building timeline.

Down Market Protection

Discover how to protect your investments while still participating in market growth.

Continue Your Financial Education Journey

Now that you understand the Rule of 72, explore more financial concepts to build your knowledge and make informed decisions about your financial future.

Learn More About Financial Education