Rule of 72 Calculator
Calculate how long it takes for your investment to double with compound interest
Rule of 72 Calculator
The annual compound interest rate
Starting investment amount for example calculations
Rule of 72 Results
Doubling Time Calculations
Investment Growth Example
Formula Used
Rule of 72: Doubling Time = 72 ÷ Interest Rate
Exact formula: t = ln(2) ÷ ln(1 + r)
Where: t = time, r = interest rate
Reverse: r = 2^(1/t) - 1
Accuracy Analysis
Example Calculation
Stock Market Investment Example
Scenario: $10,000 invested at 8% annual return
Question: How long to double the investment?
Interest rate: 8% per year
Rule of 72 Calculation
Doubling Time = 72 ÷ 8 = 9 years
Exact calculation = ln(2) ÷ ln(1.08) = 9.01 years
Result: Money doubles in approximately 9 years
Final amount: $20,000
Quick Reference Table
Investment Tips
Rule of 72 works best for rates between 6-10%
Stock market average: ~10% annually
Savings accounts: 0.5-2% typically
Start early - compound interest is powerful
Understanding the Rule of 72
What is the Rule of 72?
The Rule of 72 is a simple mathematical shortcut to estimate how long it takes for an investment to double in value. You simply divide 72 by the annual interest rate to get the approximate number of years needed for doubling.
Why Does It Work?
- •Based on the natural logarithm of 2 (≈ 0.693)
- •72 ≈ 69.3, making mental math easier
- •Works for compound interest calculations
- •Most accurate for rates between 6-10%
Alternative Rules
Rule of 69: More accurate, harder math
Rule of 70: Good for continuous compounding
Rule of 72: Best balance of accuracy and simplicity
Practical Applications
- Investments: Stock returns, mutual funds
- Debt: Credit card interest growth
- Economics: Inflation impact
- Population: Growth rate analysis
Remember: Rule of 72 assumes compound interest and constant growth rates