Double Your Money

How long until your money doubles? Divide 72 by the annual interest rate. At 6% growth, money doubles in about 12 years. At 8%, in 9 years. At 12%, in just 6. This is the Rule of 72, and it works because compound interest grows exponentially.

It is a shortcut for the exact formula, years = ln(2) / ln(1 + r). For rates from 4% to 12%, dividing 72 by the rate lands within a few months of the precise answer. Accountants and financial advisors have leaned on it for centuries — it traces back to Luca Pacioli in 1494.