Rule of 72
The fastest way to estimate how long it takes to double your money.
What Is the Rule of 72?
The Rule of 72 is a quick mental math shortcut: divide 72 by the annual rate of return to estimate how many years it takes to double your investment.
At a 10% annual return: 72 ÷ 10 = 7.2 years to double. The exact answer (using compound interest math) is 7.27 years — remarkably close.
Doubling Time at Different Rates
| Growth Rate | Rule of 72 | Exact Time | Example |
|---|---|---|---|
| 2% (savings) | 36 years | 35.0 yrs | $10K → $20K |
| 4% (bonds) | 18 years | 17.7 yrs | $10K → $20K |
| 7% (stocks avg) | 10.3 years | 10.2 yrs | $10K → $20K |
| 10% (S&P 500 avg) | 7.2 years | 7.3 yrs | $10K → $20K |
| 12% | 6 years | 6.1 yrs | $10K → $20K |
| 15% | 4.8 years | 5.0 yrs | $10K → $20K |
| 24% | 3 years | 3.2 yrs | $10K → $20K |
Works in Reverse Too
The Rule of 72 also works for inflation and depreciation. At 3% inflation, your money's purchasing power halves in 24 years. At 7% inflation, it halves in just 10 years.
Similarly, a car depreciating at 15% per year loses half its value in about 4.8 years.
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