The Rule of 72 provides a very simple way to estimate how long it will take your investment to double.
Simply divide 72 by the compound annual rate of return on the investment. The result is the number of years it will take to double your investment.
For example, if the rate is 12%, divide 72 by 12. The investment will double in approximately 6 years. At a 9% rate of return, it would take 8 years. At 0.1%, the approximate rate paid by most high-interest savings accounts in 2021, it would take 720 years! However, inflation is much higher than that, so you'd actually be losing money, because double the money would buy about 1/4 to 1/2 of the goods!
Our Rule of 72 Calculator lets you input a rate to determine the number of years, or you can input the number of years to determine the approximate rate required to double your investment.
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