Rule of 72 Calculator

Rule of 72 — The Fastest Mental Math in Investing

The Rule of 72 is a shortcut: divide 72 by the annual interest rate to find how many years it takes to double your money. At 8%, money doubles in 72/8 = 9 years. At 12%, it doubles in 72/12 = 6 years. That's the entire rule — no spreadsheet needed.

It works because compound growth follows an exponential curve, and for rates between 6–12%, dividing 72 gives you a very close approximation to the exact doubling time. At rates above 20% or below 4%, the approximation drifts more, but for most personal finance scenarios, it's accurate enough.

The rule originated from the Rule of 72 in algebra, where the natural log approximation (ln 2 ≈ 0.693) gives you the exact continuous-compounding version. For practical annual compounding, 72 gives a slightly better fit than 69.3.

Beyond Doubling — Rules of 114 and 144

The Rule of 72 gets all the attention, but there are siblings for tripling and quadrupling.

Applying the Rule to Indian Instruments

The Rule of 72 cuts through marketing noise fast. A savings account at 3.5% doubles in 72/3.5 = 20.6 years. An ELSS fund at 14% doubles in 72/14 = 5.1 years. The gap — 20 years vs 5 years — makes the choice clear for anyone with a long horizon.

Using Rule of 72 in Reverse — Inflation

The rule works in reverse too. Apply it to inflation to see how fast purchasing power halves. At 6% inflation, your money's purchasing power halves in 72/6 = 12 years. That ₹1 crore you've saved will feel like ₹50 lakh in 12 years.

This is a powerful argument to make to someone sitting on large cash balances earning nothing. The cost of not investing is not zero — it's the inflation erosion rate. At 6% inflation, ₹10 lakh sitting in a zero-interest account loses the equivalent of ₹60,000 per year in real purchasing power.