A timeless mental shortcut that reveals the true power of compound interest and the hidden cost of low returns.
The Rule of 72 is a simple formula: divide 72 by your annual rate of return to find approximately how many years it will take for your investment to double in value. It's a remarkably accurate mental shortcut that works for any consistent rate.
This powerful rule also works in reverse — apply it to inflation rates or loan interest rates to understand how quickly your purchasing power or debt burden doubles against you.
At 6% return, your money doubles in 12 years. At 12%, it doubles in 6. The difference is enormous over a lifetime of investing.
$50,000 invested at 6% doubles to $100,000 in approximately 12 years. Doubles again to $200,000 by year 24. And $400,000 by year 36.
$50,000 at 8% doubles every 9 years. That same $50,000 becomes $800,000 over 36 years — twice the outcome of the 6% scenario.
$50,000 at 12% (achievable with indexed products in strong markets) doubles every 6 years — creating extraordinary long-term wealth.
The Rule works against you too. At 3% inflation, the purchasing power of cash stored in a savings account is cut in half every 24 years. Invest or lose ground.
High-interest debt compounds just as powerfully against you. A $10,000 credit card balance at 18% doubles to $20,000 in just 4 years if unpaid.
The gap between what your debt costs and what your investments earn is the engine of wealth. Minimize borrowing costs, maximize investment returns.
Enter any interest rate to instantly see your doubling time.
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A quick mental shortcut to understand how fast your money doubles at any rate of return.
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