The shortcut
The Rule of 72 says: divide 72 by a yearly growth rate and you get roughly how many years it takes to double. At 8%, that's 72 ÷ 8 = 9 years. At 6%, about 12. It works for anything that grows by a steady percentage: an account balance, prices, or a card balance you aren't paying down.
The exact answer comes from logarithms: years = ln 2 ÷ ln(1 + rate). At 7% that's 10.24 years; the rule says 10.29. Close enough to do in your head, which is the whole point.
Why 72 works
The "true" number for continuous growth is 69.3 (that's ln 2 × 100). People use 72 because it sits close to the exact answer for everyday rates between about 6% and 10%, and because 72 divides evenly by 2, 3, 4, 6, 8, 9 and 12. The rule drifts at the edges: at 1% it says 72 years when the exact answer is 69.7, and at 22% it says 3.3 years when it's closer to 3.5.
The doubling clock
Think of each doubling as one lap of a clock. At 7% a year, one lap takes about 10.24 years, so 40 years is about 3.9 laps. Each lap doubles whatever came before, which is why $10,000 becomes about $149,745 over 40 years at a steady 7%: most of that growth shows up in the last lap or two.
Compounding changes the clock a little
Monthly compounding (the yearly rate ÷ 12, applied each month) doubles slightly faster than once-a-year compounding at the same stated rate. Daily compounding is faster still. The calculator lets you switch so you can see the gap. It's usually a few weeks to a few months, not years.
It runs in both directions
The same clock works against you. Prices rising 3% a year double in about 24 years, so a dollar buys half as much. A card balance at 22% with no payments doubles in about 3.5 years. The rule is neutral math; which side of it you're on depends on the situation.
What it leaves out
The rule assumes one steady rate. Real investment returns jump around and can be negative, fees and taxes slow things down, and inflation eats into what the doubled amount is worth. Treat the result as a way to see the shape of growth, not a forecast.
Sources
- SEC Investor.gov: Compound Interest Calculator
- A. Damodaran, NYU Stern: historical returns on stocks, bonds and bills
- U.S. Bureau of Labor Statistics: CPI Inflation Calculator
Last reviewed: Sep 28, 2026