Finance
Rule of 72 Calculator
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Good to know
A mental math tool with old roots
The rule has guided back-of-envelope finance since before spreadsheets. Its charm is reversibility: 72 ÷ years also tells you the rate needed to double within a deadline.
Beyond doubling
Chain it: money doubles in D years, so quadruples in 2D. At 8%, $10,000 becomes $40,000 in roughly 27 years without another cent contributed.
How it's calculated
The math behind this calculator
Years ≈ 72 / rate Exact: ln(2) / ln(1 + rate)Dividing 72 by the percentage growth rate approximates the doubling time of compounded money. The exact answer uses natural logarithms; we show both so you can see where the shortcut bends.
Assumptions & limitations
- Growth compounds annually at a constant rate.
- Most accurate between roughly 4% and 12%.
- Works equally for prices doubling under inflation.
Worked example
At an 8% annual return, money doubles in about 9 years by the rule of 72 (exactly 9.0 years with logarithms). At 6% inflation, prices double in about 12.
FAQ
Frequently asked questions
- Why 72 specifically?
- ln(2) ≈ 0.693, so the constant is near 69.3; 72 works well because it divides cleanly by 2, 3, 4, 6, 8, 9 and 12, and it slightly corrects for annual compounding.
- Does it work for negative rates?
- No; halving times need a different mental model. Use the exact logarithm form if rates go negative.
- Rule of 70 or 69.3?
- Same idea with different constants; 70 is popular in economics for continuous-ish growth, 72 for clean arithmetic.
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