Guide
Rule of 72 Explained
The Rule of 72 is a quick way to estimate how long it takes money to double. Here’s how it works, a rate-to-years table, and how to check with a calculator.
Published: March 12, 2025 · Updated: December 21, 2025 · By FinToolSuite Editorial
Disclaimer
Educational purposes only; not financial advice. Examples are illustrative; real returns vary and investments can go down as well as up. Fees, taxes, inflation, and rules vary by provider and country.
Quick answer
Rule of 72: years to double ≈ 72 ÷ interest rate (%). It’s a rough estimate; the calculator is more precise. More on doubling: how long to double money.
What the Rule of 72 is
The Rule of 72 estimates how many years it takes for money to double at a given annual rate. Divide 72 by the rate (as a percent). Example: at 6%, 72 / 6 ≈ 12 years.
Rate → estimated doubling time
| Rate (approx.) | Estimated years to double |
|---|---|
| 2% | ~36 years |
| 3% | ~24 years |
| 4% | ~18 years |
| 6% | ~12 years |
| 8% | ~9 years |
| 10% | ~7.2 years |
Illustrative only; exact doubling time depends on compounding, fees, taxes, and actual returns.
When it works best (and when it doesn’t)
- Works best for moderate rates (roughly 3%–10%).
- Less accurate at very low or very high rates.
- Doesn’t include fees, taxes, inflation, or variable returns.
Rule of 72 vs calculator
Example: £1,000 at 6%, monthly compounding, £0 contributions. Rule of 72: ~12 years. Calculator (illustrative): around 11–12 years, depending on compounding. The calculator is more precise.
Get a precise doubling time
- Set contributions to £0 and enter your starting amount.
- Enter your rate and choose a compounding frequency.
- Increase years until the ending balance is about double the start.
- Use the chart to see where it crosses the doubling point.
FAQ
What is the Rule of 72?
It’s a shortcut: years to double ≈ 72 divided by the annual rate (percent).
How accurate is it?
It’s approximate. It works best at moderate rates and doesn’t include fees or taxes.
Does compounding frequency affect doubling time?
Yes, slightly. More frequent compounding can shorten the time.
What rate should I use?
Test a range (conservative/base/optimistic). The rule is only an estimate.
Does the Rule of 72 include inflation?
No. It’s a nominal estimate. Inflation reduces real purchasing power.
How do fees affect doubling time?
Fees lower the effective rate, which can extend the doubling time.
Can I use it for debt or loans?
Yes, as a rough guide for how quickly amounts can grow under compounding, but exact terms matter.
How do I calculate doubling time more precisely?
Use the calculator with your rate, compounding, and no contributions, and see when the balance reaches 2× the starting amount.
Compare in the tool
Run conservative and optimistic rates to see how doubling time shifts, and compare the Rule of 72 to the calculator result.