05/12/2026
The Rule of 72 is a financial shortcut used to estimate the number of years required to double an investment at a given annual rate of return, or conversely, the rate of return needed to double money in a specific time frame. The formula is calculated by dividing 72 by the expected annual interest rate or rate of return.
Key applications include:
Investment Growth: To find the doubling time, divide 72 by the interest rate (e.g., at an 8% return, money doubles in 9 years).
Inflation Impact: To estimate how long it takes for purchasing power to halve, divide 72 by the inflation rate.
Debt Accumulation: To determine how quickly debt doubles with compound interest, divide 72 by the loan's interest rate.
The rule is most accurate for interest rates between 6% and 10% and relies on compound interest rather than simple interest. It was first referenced by mathematician Luca Pacioli in 1494.
