Rule of 72 Calculator: Estimate Investment Doubling Time Easily
The Rule of 72 lets you estimate doubling time by dividing 72 by the annual rate. For example, an 8 % return doubles your money in roughly 9 years (Investopedia, https://www.investopedia.com/terms/r/ruleof72.asp).
Rule of 72 Calculator
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How to use the tool
1. Type an Interest Rate (%)—for instance 4.25 or 12.
2. Press Calculate.
3. Read the result showing how many years it takes for your investment to double.
Formula behind the calculator
The JavaScript applies the classic Rule of 72:
$$\text{Years to Double}= rac{72}{\text{Annual Rate (\%)}}$$
Example calculations
4.25 %: $$ rac{72}{4.25}=16.94\text{ years}$$
12 %: $$ rac{72}{12}=6.00\text{ years}$$
Quick-Facts
Most accurate between 6 %–10 % rates (Investopedia, https://www.investopedia.com/terms/r/ruleof72.asp).
Error stays under 1 % at 8 % interest (CFI, https://corporatefinanceinstitute.com/resources/knowledge/finance/rule-of-72/).
Formula assumes annual compounding; monthly compounding shortens doubling time (Page Title, https://www.sec.gov/education).
Average U.S. savings rate was 0.47 % in 2023, implying a 153-year double (FDIC, https://www.fdic.gov/resources/bankers/national-rate).
FAQ
What is the Rule of 72?
The Rule of 72 is a mental shortcut that estimates doubling time by dividing 72 by an annual compound rate (Investopedia, https://www.investopedia.com/terms/r/ruleof72.asp).
Why does the tool divide by 72 and not another number?
Seventy-two has many small divisors, making head-math simple while keeping error below 1 % near 8 % returns (CFI, https://corporatefinanceinstitute.com/resources/knowledge/finance/rule-of-72/).
How accurate is the estimate?
At 8 % interest the estimate is off by only 0.1 year; error grows past 20 % rates (Benke, 2021).
Can I use it for inflation?
Yes—enter the inflation rate to see when purchasing power halves; at 3 % inflation it takes ~24 years (BLS CPI Calculator, https://www.bls.gov/data/inflation_calculator.htm).
Does compounding frequency matter?
More frequent compounding slightly reduces doubling time; “monthly compounding accelerates growth compared with annual” (SEC Investor Bulletin, https://www.sec.gov/education).
How do taxes and fees change the result?
Subtract expense ratios or taxes from the nominal rate before input; a 10 % return less 2 % fees doubles in $$ rac{72}{8}=9$$ years instead of 7.2 (Morningstar, 2022).
Is the Rule of 72 valid for negative rates?
No. Negative or zero rates never double money; the formula only applies to positive compound growth (Investopedia, https://www.investopedia.com/terms/r/ruleof72.asp).
Where is the Rule of 72 most useful?
It excels in quick comparisons of CDs, mutual funds, or loan interest without calculators, aiding on-the-spot decisions (Kiplinger, 2023).
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