The Rule of 72 answers "When will my investment double?"

The Rule of 72 answers
The rule of 72 finds the number of years to double your money at a given interest rate. Doing the math in your head is easy. Take 72 and divide by the interest rate. When you divide by the interest rate use the number without decimals. Example: 8% is 8. 10% is 10. This is a great rule to know so you can figure out the number of years for a number to double. You can also go the other way and figure out what is the annual interest rate.
 

Examples of the rule of 72

  • If I Invest $1,000 at 8% annual inteest rate, when will my money double? The answer is 9 years. 72/8 = 9 years
  • A city's population is growing at 6%. When will the population double? The answer is 12 years. 72/6 =12 years
  • We want to double our population or investment in 10 years. What interest rate will get us there? The answer is 72/10 = 7.2% 

The rule of 72 breaks down after 25%. 


YouTube video on the rule of 72

Chris Menard

Chris is a Microsoft Office Master Instructor. He trains corporate clients in Microsoft Excel, PowerPoint, Word, and Outlook. Menard is a speaker for the Georgia Society of CPAs and the University of Georgia Terry College of Business. Menard's YouTube channel has over 400 technology videos.

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