Rule of 72

How It Works

The Rule of 72 is a mental math shortcut: divide 72 by the annual interest rate to estimate how many years it takes for money to double.

Formula

Years to Double = 72 / Annual Interest Rate

In Google Sheets:

=72/rate

Where rate is a whole number (e.g., 7 for 7%)

Example

Investment Return of 8%:

=72/8

Result: 9 years to double

$10,000 at 8% becomes approximately $20,000 in 9 years.

Quick Reference Table

Rate	Years to Double
2%	36 years
4%	18 years
6%	12 years
7%	10.3 years
8%	9 years
10%	7.2 years
12%	6 years

Variations

Precise Doubling Time

For exact calculation (not approximation):

=LN(2)/LN(1+rate)

Where rate is decimal (0.08 for 8%)

Find Required Rate

To double in X years, what rate do you need?

=72/years

To double in 6 years: 72/6 = 12% annual return needed

Triple Your Money

Use Rule of 114:

=114/rate

At 8%: 114/8 = 14.25 years to triple

Quadruple Your Money

Use Rule of 144 (or double the Rule of 72):

=144/rate

At 8%: 144/8 = 18 years to 4x your money

Pro Tips

1. Works best for rates between 4-12%

2. Account for inflation - use real return (nominal - 3% inflation) for purchasing power doubling

3. Reverse it - figure out what return you need to hit goals

4. Multiple doublings - after 3 doublings, $10k → $80k

Real-World Applications

Retirement Planning

At 7% average return, your retirement savings double roughly every 10 years:

• Age 25: $10,000
• Age 35: $20,000
• Age 45: $40,000
• Age 55: $80,000
• Age 65: $160,000

(Not including additional contributions)

High-Yield Savings vs. Investing

• Savings at 4%: Double in 18 years
• Index funds at 8%: Double in 9 years

The stock market historically doubles your money twice as fast as savings accounts.

Debt Perspective

The rule works against you with debt:

• Credit card at 24%: Debt doubles in 3 years
• Student loan at 6%: Debt doubles in 12 years

This is why high-interest debt is so dangerous.