The Rule of 72

The Rule of 72 is a simplified way to estimate how long an investment will take to double given a fixed annual rate of return.

How it Works

Simply divide 72 by the annual rate of return:

Examples

• At 8% return: 72 ÷ 8 = 9 years to double your money
• At 10% return: 72 ÷ 10 = 7.2 years to double your money
• At 12% return: 72 ÷ 12 = 6 years to double your money

Using the Rule in Reverse

You can also use the Rule of 72 to find what rate of return you need to double your money in a given time period:

For example, to double your money in 4 years, you'd need approximately an 18% annual return (72 ÷ 4 = 18).