Rule of 72
A mental-math shortcut: years to double money ≈ 72 / annual return rate.
Definition
At 6% return, money doubles in ~12 years; at 8%, ~9 years; at 12%, ~6 years. Works because ln(2) ≈ 0.693, close enough to 0.72 for the 4-12% return range that covers most investment returns. Inverts cleanly: at 3% inflation, purchasing power halves every 24 years.
Formula
years_to_double ≈ 72 / annual_rate_percent
Related wealth terms
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