Plain-English definitions, reviewed by an independent investor
Rule of 72
The Rule of 72 estimates doubling time by dividing 72 by the annual return or rate.
The Rule of 72 estimates doubling time by dividing 72 by the annual return or rate.
Years to Double ≈ 72 ÷ Annual Rate (%)
Why it matters
It is the fastest mental math for compounding and debt.
Common confusion
It is an approximation, less precise at very high or low rates.
Frequently Asked Questions
Use for debt?
Yes — 72 ÷ interest rate shows how fast debt doubles if unpaid.
Why 72?
It is a neat number close to the math of ln(2) for quick division.