The Rule of 72 is a simple mental shortcut: divide 72 by your expected annual return to estimate how many years it takes your money to double. At a 7% annual return, your money doubles in about 10.3 years (72 ÷ 7 = 10.3). It’s an approximation for quick estimation, not a forecast or guarantee of returns.
Try it on our Rule of 72 calculator — it does the same math instantly for any rate or time horizon.
How the Rule of 72 works
The math is one line: 72 ÷ annual return = years to double.
- At 4% return: 72 ÷ 4 = 18 years
- At 7% return: 72 ÷ 7 ≈ 10.3 years
- At 10% return: 72 ÷ 10 = 7.2 years
You can also run it backwards: 72 ÷ years to double = the return you need. If you want your money to double in 10 years, you need roughly a 7.2% annual return (72 ÷ 10).
Where the 72 shortcut comes from
For a single investment growing at a constant effective annual rate r, doubling means (1 + r)t = 2. Solving for time gives t = ln(2) / ln(1 + r), with r written as a decimal. At 7%, that is about 10.24 years; the quick calculation 72 ÷ 7 gives 10.29 years.
At very small positive rates, the logarithm of (1 + r) is close to r, so the exact formula approaches 69.3 ÷ the annual rate in percent. Using 72 instead makes the arithmetic easy at common rates such as 6%, 8% and 12%, while keeping the estimate close to the exact answer.
When the shortcut does not fit
At 2%, the rule estimates 36 years versus about 35.0 years from the exact formula. At 15%, it estimates 4.8 years versus about 5.0 years. It does not describe a zero or negative constant return: money does not double under those assumptions. It also ignores additional deposits, withdrawals, fees, taxes and changing returns.
If a rate is quoted as a nominal annual rate with monthly compounding, convert it to an effective annual rate before using the exact annual formula: (1 + nominal rate / 12)12 − 1. For the reverse calculation and other compounding settings, use the Rule of 72 calculator.
Why it matters for your plan
The Rule of 72 makes compound growth tangible. If you’re 35 and your portfolio doubles roughly every 10 years at a 7% return, it can double about three times by the time you’re 65 — so $10,000 becomes around $80,000 before you add a single extra dollar. Doubling time is the real engine of long-term wealth.
For plans with regular contributions, doubling alone isn’t the full picture — use our Compound Interest calculator to model contributions and growth together.
Frequently asked questions
Is the Rule of 72 accurate?
For annual returns between about 5% and 12%, it is usually close to the exact result. At lower or higher positive rates, compare it with the logarithmic formula above.
Why 72 and not 70?
72 was chosen because it’s divisible by many common return rates (2, 3, 4, 6, 8, 9, 12), which makes mental math easy, and it lands slightly closer to the exact doubling constant for mid-range returns.
Does the Rule of 72 include contributions?
No — it assumes a single lump sum growing at a constant rate, with no extra contributions or withdrawals. For plans that add money regularly, use a compound interest calculator instead.
Can I use it for inflation?
Yes. Divide 72 by the inflation rate to see how quickly cash loses half its buying power. At 3% inflation, money loses half its value in about 24 years — which is why holding cash long-term is so costly.
Source & assumption
Investor.gov describes the Rule of 72 as an approximate way to estimate how long an investment may take to double by dividing 72 by an expected rate of return. Expected returns are assumptions, not guaranteed outcomes. Source: Investor.gov.