What is the Rule of 72?

The Rule of 72 is a quick mental shortcut: divide 72 by your annual interest rate to estimate how many years it takes for an investment to double. At 8 percent, 72 ÷ 8 = 9 years. The rule is accurate within about 0.5 years for rates between 4 percent and 15 percent — close enough for everyday planning without a calculator.

How accurate is the Rule of 72 versus exact compounding?

For rates between roughly 4 percent and 15 percent the Rule of 72 is within half a year of the exact answer. Outside that range it drifts: at 1 percent it underestimates by about 2 years, at 25 percent it overestimates by about a year. This calculator shows both — the rule-of-thumb and the exact ln(2)/ln(1+r) result — side by side.

Why not just use the exact formula?

You can — and this tool does. But the Rule of 72 became famous because you can run it in your head while standing in a bank lobby. It anchors your intuition: every percentage point of rate roughly subtracts 8 years off the doubling time at low rates, or 2-3 years at higher rates. That intuition is what makes the rule worth knowing even in an age of calculators.

Capital Growth Calculator — The Iraqi Investor

Path to doubling

Rule of 72 estimate

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Exact doubling time

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Doubled amount

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Target year

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Year-by-year breakdown

Year	Starting balance	Interest	Ending balance

The Rule of 72 is a classic shortcut: divide 72 by your annual interest rate and you get roughly how many years it takes for your money to double.

This calculator is for educational purposes only and is not investment advice. Rates shown are assumed values and do not guarantee future returns.