The Rule of 72 is a shortcut: 72 divided by the annual growth rate approximates the years needed to double your money. At 8% that is about 9 years.
The rule is remarkably accurate for rates between roughly 4% and 12%. The calculator shows the exact doubling time next to the estimate so you can see the error.
It also works in reverse — divide 72 by a number of years to find the rate you would need to double within them. It applies to anything that compounds, including inflation eroding purchasing power.
The number 72 is chosen for its divisors rather than its accuracy — it divides cleanly by 2, 3, 4, 6, 8, 9 and 12, which is what makes the arithmetic doable in your head. At very low rates 69 is closer to the true figure and at high ones 76 fits better, but neither is memorable and both cost the property that made the rule useful. The point is not precision; it is being able to check a claim about doubling without reaching for anything, and at any rate you are likely to be quoted it is accurate to within a few months.
Frequently asked questions
How does the Rule of 72 work?
Divide 72 by the annual growth rate to approximate the years needed to double: at 6%, about 12 years. It is a logarithm shortcut that happens to be very accurate at everyday rates.
How accurate is the Rule of 72?
Within a few months of the exact answer for rates between roughly 4% and 12%. Outside that range the error grows — the calculator shows the exact doubling time next to the estimate.
Does the Rule of 72 work for inflation?
Yes. Divide 72 by the inflation rate to see how many years it takes prices to double — equivalently, for purchasing power to halve. At 3% inflation, that is about 24 years.