Breakdown
How it works
The rule is accurate within a few months for rates between 4% and 12%. For debt it shows how quickly a balance doubles if unpaid — at 24% a credit-card balance doubles in 3 years.
Formula
Years ≈ 72 ÷ rate
Exact: ln(2) ÷ ln(1 + rate)
Triple ≈ 114 ÷ rate
Worked example
At 8%: 72 ÷ 8 = 9 years; exact 9.01. At 6%: 12 years; at 3% inflation prices double in 24 years.
Frequently asked questions
Why 72?
It is close to 100 × ln(2) ≈ 69.3 and divides neatly by 2, 3, 4, 6, 8, 9 and 12. Use 70 for continuous compounding or low rates and 73–74 for high rates.
How many times does money double over a career?
At 7% it doubles every ~10 years — four doublings over 40 years turns 10,000 into 160,000.