What does this tool do?
The Rule of 72 divides 72 by the annual percentage return to approximate doubling time. It is a quick mental model for compound growth, not a promise of future returns.
The Formula
Doubling years ≈ 72 ÷ Annual return (%)Frequently Asked Questions
Why 72 instead of 69?
The natural log of 2 is about 0.693, but 72 divides easily by common rates and slightly overstates doubling time, which partly offsets more frequent compounding.
Does the rule work for high returns?
Accuracy falls at very high or very low rates. Use the exact formula ln(2) ÷ ln(1 + r) when you need a precise figure.