Glossary term
Rule of 72
The Rule of 72 is a mental-math shortcut for estimating how long money takes to double at a fixed compound rate: divide 72 by the annual percentage rate. At 8%, money doubles in about nine years. It works best for rates between roughly 4% and 12% and can also estimate how fast debt or inflation doubles.
Updated October 17, 2026 · Editorial Team
How Rule of 72 works in practice
The rule comes from the exact doubling formula, years = ln(2) ÷ ln(1 + r). For typical rates, 72 divided by the rate in percent lands very close to that answer, and 72 is easy to divide by many numbers. You can also flip it: 72 divided by the years you have tells you the rate you would need.
At 8%, the rule says 72 ÷ 8 = 9 years; the exact answer is 9.01 years. At 6%, the rule gives 12 years versus an exact 11.90. Both are close enough for quick planning, but use a calculator for anything you will act on.
The rule is a fast way to feel the power of compounding, or the cost of it. A card balance at 24% left unpaid with no payments would double in about three years. Prices rising 3% a year would double in about 24 years.
Rule of 72: quick questions
How accurate is the Rule of 72?
Very close for rates around 4% to 12%. At very high or very low rates the estimate drifts further from the exact figure.
Can the Rule of 72 apply to debt?
Yes. An unpaid balance compounding at 18% would roughly double in 72 ÷ 18 = 4 years.
What are the Rule of 69 and 70?
They are variants. 69.3 is more precise for continuous compounding, and 70 is sometimes used for low rates.
Sources
- Rule of 72 (glossary) — U.S. Securities and Exchange Commission (Investor.gov). Accessed October 17, 2026.
- Compound Interest Calculator — U.S. Securities and Exchange Commission (Investor.gov). Accessed October 17, 2026.
We cite primary sources: regulators, central-bank data and federal agencies. Worked examples on this page are our own calculations. See our methodology.
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