What is the rule of 72?
Divide 72 by an annual percentage rate and the result approximates the number of years for the underlying amount to double. Six percent doubles in about 12 years, 8 percent in about 9, and 12 percent in about 6. The accuracy is good for rates roughly between 4 and 15 percent and drifts at the extremes, where 69 or 70 is a closer constant, but 72 wins on practicality because it divides evenly by so many numbers, which is the entire point of a rule meant to be done without a calculator.
Its usefulness comes from working in both directions. Applied to savings, it shows why starting early matters more than contributing more: money that doubles four times is 16 times its original size, and each additional doubling period is worth more than everything before it. Applied to debt, it explains credit card balances, since a 24 percent APR doubles an unpaid balance in about three years. Applied to inflation, it shows what erosion looks like, since 3 percent inflation halves purchasing power in roughly 24 years, which is why retirement planning that ignores inflation fails quietly. The same arithmetic underlies population growth, compound interest on student loans, and any process growing by a constant percentage, which is a category people consistently underestimate because human intuition is linear and compounding is not.
Divide 72 by an annual growth rate to get the years it takes to double. At 6 percent, money doubles in about 12 years. It works for debt too, which is why credit card balances grow the way they do.
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https://frequentlyaskedquestions.us/q/what-is-the-rule-of-72/Everybody Asks. (2026, July 28). What is the rule of 72? https://frequentlyaskedquestions.us/q/what-is-the-rule-of-72/“What is the rule of 72?” Everybody Asks, 28 July 2026, https://frequentlyaskedquestions.us/q/what-is-the-rule-of-72/.“What is the rule of 72?” Everybody Asks. Last modified July 28, 2026. https://frequentlyaskedquestions.us/q/what-is-the-rule-of-72/.This page summarizes the primary sources listed above. For academic or encyclopedic work, cite those primary sources directly wherever possible.