Compound Interest Guide
What Is the Rule of 72?
Use the Rule of 72 to quickly estimate how long it may take money to double at a given annual return.
A quick mental shortcut
The Rule of 72 is a simple way to estimate how long it may take money to double. Divide 72 by the annual return percentage, and the result is the approximate number of years.
For example, at a 6% annual return, 72 divided by 6 equals about 12 years. At 8%, the estimate is about 9 years.
Why it is useful
The rule is not exact, but it helps people understand the relationship between return and time. Higher rates can shorten the doubling period, while lower rates require more patience.
It is especially useful when you want a quick estimate before using a more detailed calculator.
Its limits
The Rule of 72 assumes a steady annual return and does not include taxes, fees, inflation, or changing rates. It also does not handle recurring contributions.
Use it as a quick educational shortcut, not as a complete financial plan.