Rule of 72

The Rule of 72 is a mental-math shortcut for estimating how long an investment takes to double at a given compound annual rate — divide 72 by the annual rate (expressed as a percentage) and the answer is the doubling time in years. It is the single most useful number-sense rule in personal finance: back-of-envelope, no calculator, and accurate within half a year for rates between 4% and 15%.

The rule works because it is a linear approximation of ln(2) × 100 ≈ 69.3, rounded up to 72 for easier mental division. Worked examples: 6% rate → 72 ÷ 6 = 12 years to double; 9% → 8 years; 12% → 6 years; 18% → 4 years. Inverted, it also answers "what return do I need to double in X years?" — need to double in 10? You need 7.2%. Stacking it: ₹1 lakh at 12% doubles every 6 years, so in 30 years it goes 1 → 2 → 4 → 8 → 16 → 32 lakh — five doublings, 32× growth.

The same approximation works for inflation-driven halving of purchasing power: at 6% inflation, the rupee's value halves every 12 years.

Rule of 72 is a quick sanity check, not a precise answer — use our compound interest or SIP calculator for exact figures once the ballpark feels right.