Rule of 72


The time required for a given principal to double (assuming n=1 conversion period) for compound interest is given by solving




where ln is the natural logarithm. This function can be approximated by the so-called "rule of 72":

 t approx (0.72)/r.

The above plots show the actual doubling time t (left plot) and the difference between the actual doubling time and the doubling time calculated using the rule of 72 (right plot) as a function of the interest rate r.

See also

Compound Interest, Interest

Explore with Wolfram|Alpha


Avanzini, J. F. Rapid Debt-Reduction Strategies. Fort Worth, TX: HIS Pub., 1990.

Referenced on Wolfram|Alpha

Rule of 72

Cite this as:

Weisstein, Eric W. "Rule of 72." From MathWorld--A Wolfram Web Resource.

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