Rule of 72:

The Rule of 72 is a quick money formula to calculate how many years an investment will take to double at a steady annual rate of return. It can be applied by dividing 72 by the rate of return each year (a percentage):

For instance, if your investment returns 8% annually, it would take about 9 years for your investment to double (72 ÷ 8 = 9).

• The Rule of 72 can be used in reverse as well: to double your money in a specific number of years, divide 72 by the number of years to estimate the rate of annual return needed.
• While it is an estimate, it is closest for yearly rates from 6–10%.

The Rule of 72 is used extensively as a mental mathematics tool in finance in order to determine the power of compounding in investments, inflation, or debt.