Rule of 72 (estimating an investment's doubling time)

Description

Rule of 72 is a method for estimating an investment’s doubling time. The rule number 72 is divided by the interest percentage per period to obtain the approximate number of periods (usually years) required for doubling. The value 72 is a convenient choice of numerator, since it has many small divisors: 1, 2, 3, 4, 6, 8, 9, and 12. It provides a good approximation for annual compounding, and for compounding at typical rates (from 6% to 10%). The approximations are less accurate at higher interest rates.

Related formulas

Variables

taproxTime required for the investment to be double (dimensionless)
iInterest annual ( e.g number 9 if 9%) (dimensionless)