Rule of 72 Calculator

A Quick Financial Shortcut

The Rule of 72 is a simple and useful mental shortcut for estimating the number of years it will take for an investment to double in value, given a fixed annual rate of return. This calculator applies that rule, providing a rapid estimate of your investment's doubling time.

The Rule of 72 Formula Explained

Years to Double ≈ 72 / Annual Interest Rate (%)

• Annual Interest Rate: Enter the rate of return as a percentage (e.g., enter 8 for 8%).

How to Use the Calculator

1. Annual Interest Rate (%): Enter the estimated annual rate of return for your investment.
2. Calculate: The tool will instantly show the approximate number of years it will take for your money to double.

Real-World Example

You have an investment that you expect to earn an average of 9% per year.

• Calculation: 72 / 9 = 8
• It will take approximately 8 years for your investment to double.

If you have a savings account earning only 2% interest:

• Calculation: 72 / 2 = 36
• It would take approximately 36 years for your money to double.

Frequently Asked Questions (FAQ)

• How accurate is the Rule of 72? It's an approximation, but it's remarkably accurate for interest rates typically seen in financial planning (from about 6% to 10%). For very low or very high rates, it becomes less precise. The Rule of 69.3 is more accurate mathematically, but 72 is used because it is more easily divisible.
• Can I use this to calculate the rate needed to double my money? Yes, you can use it in reverse. If you want to double your money in 10 years, you would need an approximate annual return of 72 / 10 = 7.2%.
• Does this work for debt? Yes, it can also estimate how long it will take for a debt to double if no payments are being made (for example, with a loan in deferment where interest is still accumulating).