The Rule of 72: How Fast Will Your Money Double?
A one-line mental shortcut for doubling time, with examples, and how it relates to CAGR and compound interest.
Divide 72 by your annual return and you get the approximate years for money to double.
Quick examples
- At 3%: 72 / 3 = 24 years.
- At 6%: 72 / 6 = 12 years.
- At 8%: 72 / 8 = 9 years, so $10,000 becomes about $20,000.
It works in reverse
Want to double in 10 years? You need about 7.2% a year. It also shows how fast inflation cuts value: at 3% inflation, prices double in 24 years.
Where it is less accurate
The rule is a shortcut and drifts at very high or very low rates. For exact answers, use the Rule of 72 calculator, measure past performance with the CAGR calculator and project future growth with the compound interest calculator.
This article is general education, not financial advice.