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A mental math shortcut used to rapidly calculate the approximate number of years required to double an investment at a fixed annual compound rate.
Use our verified, free in-browser Compound Interest Calculator to run scenarios and export PDF reports.
The Rule of 72 is derived from the natural logarithm ln(2) ≈ 0.693, adjusted upward to 72 to accommodate small compounding increments and allow high divisibility by common integers (2, 3, 4, 6, 8, 9, 12).
It works with high accuracy for interest rates between 5% and 12%.
Estimated years (t) to double your principal equals 72 divided by the annual percentage rate (r).
Years required for investment to double in nominal value.
Compound interest rate as a whole percentage number (e.g., 8 for 8%).
Scenario: Calculating how fast $50,000 doubles at a 9% annual equity return
❌ Misconception: The Rule of 72 is an exact mathematical equality.
✔ Reality: It is a heuristic approximation. For ultra-high interest rates (>20%), the exact formula t = ln(2) / ln(1 + r) should be used.
The Rule of 114 estimates time to triple an investment (114/r), and the Rule of 144 estimates time to quadruple (144/r).