The Rule of 72 is a quick way to estimate how long money takes to double: divide 72 by the annual rate of return. At 8% it gives 9 years (72 ÷ 8). The exact answer at 8% compounded annually is 9.01 years, so the shortcut is close.
Rule of 72 versus the exact doubling time
| Annual rate | Rule of 72 (years) | Exact (years) |
|---|---|---|
| 2% | 36.0 | 35.0 |
| 4% | 18.0 | 17.7 |
| 6% | 12.0 | 11.9 |
| 7% | 10.3 | 10.2 |
| 8% | 9.0 | 9.0 |
| 10% | 7.2 | 7.3 |
| 12% | 6.0 | 6.1 |
The rule is most accurate for rates between roughly 6% and 10% and drifts slightly at the extremes.
What $10,000 becomes
| Rate | After 10 years | After 20 years | After 30 years |
|---|---|---|---|
| 4% | $14,802 | $21,911 | $32,434 |
| 6% | $17,908 | $32,071 | $57,435 |
| 8% | $21,589 | $46,610 | $100,627 |
| 10% | $25,937 | $67,275 | $174,494 |
These are hypothetical, assume annual compounding and no additions, and ignore taxes, fees and inflation. Real investment returns vary and are never guaranteed.
Using the rule for debt and inflation
The same shortcut works in reverse. A balance growing at 24% APR roughly doubles in 3 years if left unpaid (72 ÷ 24). Inflation of 3% halves purchasing power in about 24 years. Use the Compound Interest Calculator for exact figures with regular contributions.
Worked example: why starting early matters
At an assumed 8% annual return, $10,000 doubles to about $20,000 in 9 years, $40,000 in 18 years, and $80,000 in 27 years. The last nine years add $40,000, more than the first eighteen years combined ($30,000). That acceleration is compounding: growth earns growth. Waiting an extra nine years to start cuts the final result in half, which is why time in the market is a central idea in long-term planning.
Rule of 69.3 and Rule of 70
Some people use 70 or 69.3 instead of 72. The exact constant for continuous compounding is 69.3, while 72 is popular because it divides evenly by many common rates (2, 3, 4, 6, 8, 9, 12). For everyday estimates the differences are small.
Limits of the rule
- It assumes a constant rate; real returns vary year to year.
- It ignores taxes, fees and inflation, which reduce actual growth.
- It describes a single lump sum, not regular contributions. For contributions use the Investment Calculator.
For retirement-focused planning, see the Retirement Calculator and the savings rate guide.
Try the Compound Interest Calculator
Common questions
What is the Rule of 72?
A shortcut: divide 72 by the annual rate of return to estimate the years needed to double an investment.
How accurate is the Rule of 72?
It is close for typical rates. At 8% it estimates 9 years versus an exact 9.01.
Does the Rule of 72 guarantee returns?
No. It only describes the math of compounding at an assumed constant rate. Actual returns fluctuate.