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Rule of 72

Before you commit to an investment, know this: at your expected return, how long until your money doubles?

✓ Formula verified June 2026✓ Source: Investopedia
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The Rule of 72 is a mental math shortcut: divide 72 by the annual rate to estimate years to double your money.

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Enter a rate to see doubling time

Worked Examples

Stock market average return

Annual return: 7% (historical S&P 500 real return) → T = 72 / 7 = ~10.3 years. Exact: 10.24 years. At 7% real returns, a long-term investor doubles purchasing power roughly every decade.

High-yield savings account

Annual return: 5% → T = 72 / 5 = 14.4 years to double. Compared to a checking account at 0.1%: T = 720 years. The rate difference is enormous.

Inflation eroding purchasing power

Inflation rate: 3% → T = 72 / 3 = 24 years to halve purchasing power. The Rule of 72 works in reverse too — at 3% inflation, money loses half its value in 24 years.

Frequently Asked Questions

~3 min read
Why 72 and not another number?▾
The Rule of 72 is an approximation of the exact formula: T = ln(2) / ln(1 + r). Since ln(2) ≈ 0.693, and 72 is divisible by many common interest rates (2, 3, 4, 6, 8, 9, 12), it gives convenient whole-number answers. For rates near 8%, the approximation is almost exact; it loses accuracy below 2% and above 20%.
Can I use the Rule of 72 for inflation?▾
Yes. If inflation is 4%, purchasing power halves in approximately 18 years. The same logic applies to any exponential decay or growth: debt, population, compound interest, or any rate expressed annually.
What is the Rule of 114 and Rule of 144?▾
These are extensions of the same idea. 114 ÷ rate gives years to triple your money; 144 ÷ rate gives years to quadruple it. Calcureal displays all three milestones together.
Is the Rule of 72 accurate?▾
At rates between 5% and 10%, the error is under 0.5%. At 2% it overestimates by about 1.5%; at 15% it underestimates by about 2%. For a mental math shortcut it is excellent. The exact formula — T = ln(2) / ln(1 + r) — is available in the exact calculation shown on this page.
Does compounding frequency affect the Rule of 72?▾
The classic Rule of 72 assumes annual compounding. For monthly compounding at a nominal rate, use the APY instead of the nominal rate to get a more accurate doubling time estimate.
How does Warren Buffett use the Rule of 72?▾
Buffett and Munger have referenced the Rule of 72 in shareholder letters to illustrate the power of compounding over long periods. At Berkshire's historical 20% annual returns, money doubled roughly every 3.6 years — the compounding effect is why time horizon matters as much as rate of return.

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For informational purposes only. Not financial advice. Formula last verified June 2026. See our Privacy Policy for data handling.

Rule of 72 Calculator — Years to Double Your Money | Calcureal