Inflation Works in Reverse

The Rule of 72 also shows how inflation eats purchasing power. At 3% inflation, prices double in 72 ÷ 3 = 24 years. A $5 coffee today will cost $10 by then. Your savings have to grow faster than inflation, or their real value shrinks a little every year.

Credit card debt works the same way — against you. At 18% interest, unpaid debt doubles in 72 ÷ 18 = 4 years. A $5,000 balance becomes $10,000 in four years if you make no payments. The Rule of 72 turns abstract interest rates into concrete timelines that motivate action.