Rule of 72 Explained With Examples
The complete Rule of 72 guide — formula, table of rates vs doubling time, reverse application, inflation, and debt examples.
📅 Updated 2026-03-14
🕒 5 min read
📋 Free Calculator Included
📚 What Is the Rule of 72?
The Rule of 72 is a quick mental math shortcut that tells you approximately how long it will take for an investment to double in value at a given compound annual growth rate. Divide 72 by the annual interest rate (as a percentage) and you get the number of years to double your money.
Rule of 72Years to Double = 72 / Annual Interest Rate (%)
Or inversely:
Required Rate = 72 / Years to Double
🧪 Rule of 72 Examples
| Rate | Years to Double | Actual Years | Accuracy |
|---|
| 4% (savings) | 18 years | 17.7 years | 98% accurate |
| 6% (PPF) | 12 years | 11.9 years | 99% accurate |
| 8% | 9 years | 9.0 years | 100% accurate |
| 10% | 7.2 years | 7.27 years | 99% accurate |
| 12% (equity) | 6 years | 6.12 years | 98% accurate |
| 15% | 4.8 years | 4.96 years | 97% accurate |
| 24% (VC) | 3 years | 3.22 years | 94% accurate |
🌟 Real World Applications
FD at 7%: 72/7 = 10.3 years to double. ₹1 lakh becomes ₹2 lakh in ~10 years.
Nifty 50 at 12%: 72/12 = 6 years to double. ₹5 lakh becomes ₹10 lakh in ~6 years.
Inflation at 6%: 72/6 = 12 years. Prices double every 12 years — meaning your cash loses half its purchasing power.
📝 Reverse Rule of 72
You can also use Rule of 72 in reverse — to find what interest rate you need to double your money in a target number of years.
🌟 Reverse Example
Goal: Double your money in 5 years
Required rate: 72 / 5 = 14.4% CAGR needed
This immediately tells you that a 7% FD will not double your money in 5 years — you need equity-level returns.
Rule of 72 for Inflation and Debt
- Inflation impact: At 6% inflation, purchasing power halves every 12 years. Your ₹1 lakh today will be worth only ₹50,000 in real terms by 2037.
- Credit card debt at 36%: 72/36 = 2 years. Unpaid credit card debt doubles every 2 years.
- Loan interest at 8.5%: Total debt (if unpaid) would double in ~8.5 years.
⚡
Use the Rule of 72 Calculator
Instantly calculate how long any investment takes to double — with accurate compound growth breakdown.
❓ Frequently Asked Questions
Is the Rule of 72 exact?+
No — it is an approximation. The exact formula uses natural logarithm: Years = ln(2)/ln(1+r). Rule of 72 is accurate to within 1–2% for rates between 4% and 15%. It is a mental math tool, not a replacement for exact calculation.
Why 72 and not 70 or 69?+
72 is convenient because it is divisible by 1, 2, 3, 4, 6, 8, 9, and 12 — making mental division easy. Mathematically, 69.3 is slightly more accurate (since ln(2) = 0.693), and some analysts prefer Rule of 70 for simplicity at common rates.
Does Rule of 72 work for SIP investments?+
No. Rule of 72 applies only to lump-sum investments with compound growth. For SIP, the mathematics is different — use an SIP calculator which uses the future value of annuity formula.
💡 Tip: Rule of 72 works best for rates between 6% and 12%. For higher rates, use Rule of 70 or 69.3 for slightly more accuracy.