What Is the Rule of 72?

By Jon Quast – Updated Dec 18, 2024 at 10:45 AM

Key Points

Rule of 72 estimates time for investment to double: divide 72 by annual growth rate.
Understanding compound returns via Rule of 72 aids in setting financial goals.
Use of Rule 72 can direct investments, minimizing need for high-risk strategies.

The Rule of 72 is a quick and easy way to figure out how long it will take for an investment to double in value. It's not a precise rule of thumb, but it will get you close to the answer, and the math can be done by most people in their heads.

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A hand using a calculator on a desk filled with paperwork. — Image source: Getty Images.

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Compound Interest

Compound interest is what you get when you reinvest your earnings, which then also earn interest.

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About the Author

Jon Quast is a contributing writer for The Motley Fool covering consumer goods, technology, and cryptocurrency. Before The Motley Fool, he was a missionary in South America.

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Jon Quast has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Domino's Pizza. The Motley Fool has a disclosure policy.