Rule of 72 Calculator by Years + Interest Rate (2024)
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The Rule of 72 predicts how long an investment will take to double based on a fixed annual interest rate. The rule is this: 72 divided by the interest rate number equals the number of years for the investment to double in size. For example, if the interest rate is 12%, you would divide 72 by 12 to get 6.
Applying the rule of 72, it takes about 72 / 5.75 = 12.52 years to double the investment. We can compare the approximate number to the actual number. Suppose it takes T years to double the investment at 5.75%, then we must have ( 1 + 5.75 % ) T = 2 , which yields T = 12.40.
For example, the Rule of 72 states that $1 invested at an annual fixed interest rate of 10% would take 7.2 years ((72/10) = 7.2) to grow to $2. In reality, a 10% investment will take 7.3 years to double (1.107.3 = 2). The Rule of 72 is reasonably accurate for low rates of return.
So, if the interest rate is 6%, you would divide 72 by 6 to get 12. This means that the investment will take about 12 years to double with a 6% fixed annual interest rate.
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