The Rule of 72 is a simple way to estimate how long an investment will take to double in value at a fixed yearly rate of return. Divide 72 by the yearly rate, written as a whole number.
Years to double ≈ 72 ÷ yearly rate (%)
The rate is written as a whole number: 6 for 6% a year.
For example, if an investment earns 6% a year, 72 ÷ 6 = 12, so it would take about 12 years to double. The exact answer is 11.9 years, which shows how close the shortcut gets. The rates here are examples, not forecasts of what any investment will earn.
The rule gives a quick feel for the power of compounding without any complex calculation. It is also handy for comparing options: at 8% a year, money doubles in about 9 years; at 6%, in about 12.
The rule works best for rates between about 6% and 10%; outside that range it drifts a little further from the exact answer. Even so, it is a useful tool for long-term decisions, because it shows how much both time and the rate of return matter in building wealth.
It works for inflation too. If prices rise by 6% a year, they double in about 12 years, which means money left idle loses about half its buying power in that time. The same shortcut that shows how money can grow when it is put to work also shows how quickly it shrinks when it is not.
This article explains a general calculation. It is not personal investment advice.