Rule of 72
A quick way to estimate how long it takes money to double: divide 72 by the annual return.
The Rule of 72 is a mental-math shortcut: dividing 72 by an annual rate of return gives the approximate number of years for an investment to double. It illustrates the power of compounding and the impact of even small differences in return.
Examples
- At an 8% annual return, money roughly doubles every 9 years (72 ÷ 8).