Rule of 72 Explained: Formula, Examples and Accuracy

Years to double ≈ 72 ÷ annual rate in percent.
The estimate is most accurate for rates between about 4% and 12%.
Use 70 for low rates and 69.3 for continuous compounding.
The same rule shows how fast inflation halves buying power and how fast unpaid debt doubles.

What the Rule of 72 says

The rule has one formula:

Years to double ≈ 72 ÷ annual rate of return (as a percent)

Use the rate as a whole number, not a decimal. For 8%, divide 72 by 8, not by 0.08.

At 3%, money doubles in about 72 ÷ 3 = 24 years.
At 6%, it doubles in about 12 years.
At 9%, it doubles in about 8 years.

You can also turn it around. To find the rate needed to double money in a set time, divide 72 by the number of years. Doubling in 10 years takes about 72 ÷ 10 = 7.2% a year.

The starting amount does not matter. At the same rate, $500 and $50,000 take the same time to double, because the rule depends only on the rate.

The rule assumes compound growth, where each year's earnings stay invested and earn returns themselves. If you are new to the idea, read how compound interest works.

Why it works, roughly

The exact doubling time comes from the compound growth formula. Money doubles when (1 + rate) raised to the number of years equals 2. Solving for years gives:

Years = ln(2) ÷ ln(1 + rate)

Here ln is the natural logarithm, and ln(2) is about 0.693. For small rates, ln(1 + rate) is very close to the rate itself. That turns the formula into roughly 0.693 ÷ rate, or 69.3 divided by the rate in percent.

So why 72 and not 69.3? Two reasons:

The shortcut slightly understates doubling time at everyday rates, and bumping the number up to 72 corrects for that. Near 8%, 72 is almost exact.
72 divides evenly by 2, 3, 4, 6, 8, 9 and 12, which makes mental math easy.

How accurate is it?

The table compares the rule with the exact answer for money compounded once a year.

Annual rate	Rule of 72	Exact years
2%	36.0	35.0
4%	18.0	17.7
6%	12.0	11.9
8%	9.0	9.0
10%	7.2	7.3
12%	6.0	6.1
18%	4.0	4.2
24%	3.0	3.2

Between 4% and 12%, the estimate is off by only a few months. At very low rates it runs a little long. At high rates it runs short, and the gap grows as the rate climbs. For an exact figure at any rate, use the Rule of 72 calculator.

The Rule of 70 and the Rule of 69.3

The same shortcut comes in other versions. They differ only in the number on top.

Rule of 69.3: the most precise choice for continuous compounding, where interest is added constantly instead of once a year. It is also close for daily compounding.
Rule of 70: a good fit for low rates, around 1% to 3%. It is often used for inflation and population or economic growth.
Rule of 72: best for typical long-run investment returns with annual compounding, and the easiest to do in your head.

At 2%, the Rule of 70 gives 35 years, which matches the exact answer. The Rule of 72 gives 36. For most quick estimates, any of the three is close enough.

You can stretch the rule too. Since quadrupling is two doublings in a row, divide 144 by the rate to estimate how long money takes to grow four times.

Using it for inflation and debt

The rule applies to anything that compounds, including things that work against you.

Inflation. Divide 72 by the inflation rate to estimate how long it takes prices to double, which is the same as buying power falling by half. At 3% inflation, that takes about 24 years. At 6%, about 12 years. The inflation calculator shows the effect on a specific amount.

Debt. A balance that grows at 18% a year with no payments doubles in about 72 ÷ 18 = 4 years. A $2,000 balance would grow to nearly $4,000 in that time.

Fees and real returns. Small rate differences matter over time. At 6%, money doubles in 12 years. If costs or inflation take 2 points and leave 4%, doubling takes 18 years.

A quick way to use the rule:

Pick the annual rate as a percent.
Divide 72 by it to get years per doubling.
Divide your time horizon by that number to count the doublings.

Example: at 8%, money doubles every 9 years. Over 27 years that is three doublings, so $10,000 grows to about $20,000, then $40,000, then $80,000.

Limits of the rule

It assumes a constant rate. Real investment returns change every year, so the result is a rough guide, not a forecast.
It only fits compound growth. With simple interest, where interest is never added to the balance, doubling at 6% takes 100 ÷ 6 = 16.7 years, not 12.
It ignores new deposits and withdrawals. The rule tracks a single lump sum. Regular contributions shorten the time to reach a goal.
It ignores taxes and fees unless you subtract them from the rate first.
It loses accuracy at extremes. At very high rates the estimate becomes too short.

Treat the Rule of 72 as a fast sanity check. When the numbers matter, model the full picture with the compound interest calculator or the future value calculator.

Try it with your own numbers

Frequently asked questions

How do you use the Rule of 72?

Divide 72 by the annual growth rate, written as a percent. The answer is the approximate number of years for the amount to double. At 4%, that is 72 ÷ 4 = 18 years. To find a required rate instead, divide 72 by the number of years you have. Doubling in 12 years needs about 6%.

Is the Rule of 72 accurate?

It is a close estimate for rates from about 4% to 12%, usually within a few months of the exact answer. It is nearly exact at 8%. Outside that range the error grows. At 2% it overstates doubling time by about a year, and at 24% it understates it by a few months.

Does the Rule of 72 work with monthly compounding?

It still gives a reasonable estimate, but it runs slightly long. More frequent compounding makes money grow a little faster than annual compounding at the same stated rate. For monthly or daily compounding, dividing 70 or 69.3 by the rate is usually closer. The difference is small for quick mental math.

Can the Rule of 72 be used for inflation?

Yes. Divide 72 by the annual inflation rate to estimate how many years it takes for prices to double, which also means the buying power of money falls by half. At 4% inflation, that is about 18 years. For low inflation rates, dividing 70 by the rate is slightly more accurate.

Sources and further reading

Written and reviewed by the Capital Calculators editorial team. Every figure in this guide is calculated, then checked against the calculators on this site. Read our editorial policy and methodology. Last reviewed November 15, 2026.

This guide is general education, not financial advice. Rules of thumb vary by lender, industry and country.

The Rule of 72 Explained