Rule of 72 Calculator
Estimate the exact number of years required to double an investment at any fixed annual compound interest rate.
About the Rule of 72
The Rule of 72 is a simplified mental math shortcut used in corporate finance and investing to approximate how long an investment takes to double given a fixed annual rate of interest.
Formulas
- Rule of 72 Approximation: Years to Double ≈ 72 / Annual Interest Rate
- Exact Compound Formula: Years = ln(2) / ln(1 + r)
Worked Example
At an annual compounding growth rate of 8%:
- Rule of 72 approximation: 72 / 8 = 9.00 years
- Exact logarithmic calculation: ln(2) / ln(1.08) = 9.01 years
- Final portfolio value: $20,000
Frequently Asked Questions
At what interest rates is the Rule of 72 most accurate?
The rule is most accurate for rates between 6% and 10%. For higher rates, adjustments like the Rule of 70 or 69.3 provide slightly tighter precision.
Does this account for regular recurring monthly deposits?
No. The Rule of 72 calculates the doubling timeline for a single static lump-sum deposit compounding over time.
Can the Rule of 72 be used for inflation?
Yes. Dividing 72 by the annual inflation rate tells you how many years it will take for your money's purchasing power to be cut in half.
Does the rule work with negative rates?
In deflationary or depreciating asset models, the rule approximates halving time rather than doubling time.
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- 1Enter your valuesUse the fields above and check the units shown beside each input.
- 2Run the calculationSelect Calculate to refresh the result with your latest values.
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