The Rule of 72: Double Your Money

The Rule of 72 is a quick, useful formula that is popularly used to estimate the number of years required to double the invested money at a given annual fixed interest rate.

The Formula

It is surprisingly simple:

Years to Double = 72 / Interest Rate

You simply divide the number 72 by your expected annual return rate.

Hypothetical Scenarios

Note: These numbers are for mathematical illustration only. Actual returns vary.

• Scenario A (Fixed Deposit at 6%): 72 / 6 = 12 Years. Mathematically, it takes 12 years to double money at a steady 6% rate.

• Scenario B (Investment at 12%): 72 / 12 = 6 Years. At a hypothetical 12% return, money doubles in 6 years. Warning: Market-linked investments do not offer fixed returns.

• Scenario C (Savings Account at 3%): 72 / 3 = 24 Years. It takes roughly a quarter of a century to double money at 3%.

Reverse Use: Inflation

You can also use the Rule of 72 to see how fast your money loses value due to Inflation.

If inflation is 6%, you divide 72 by 6.

72 / 6 = 12 Years

This means in 12 years, the value of your money will be halved. ₹1 Lakh today will only buy ₹50,000 worth of goods in 12 years.

Limitations

The Rule of 72 is an approximation.

• It is most accurate for interest rates between 6% and 10%.
• For very high rates (like 20%+), the error margin increases, but it is still good enough for mental math.

Try It Yourself

Use our calculators to see exact doubling times for your specific investments.

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