What is the Rule of 72?

The Rule of 72 is a quick formula to estimate how long it takes for an investment to double. Divide 72 by the annual interest rate to get the approximate years to double. At 8% returns, your money doubles in about 9 years (72 ÷ 8 = 9).

How accurate is the Rule of 72?

The Rule of 72 is most accurate for interest rates between 6% and 10%. For rates outside this range, it becomes less precise. At very low rates (1-2%), the Rule of 70 is more accurate. At very high rates (20%+), the Rule of 69.3 works better.

How long does it take to double $10,000?

The time depends on your rate of return. At 7% annual return, $10,000 doubles in about 10.3 years (72 ÷ 7). At 10%, it doubles in 7.2 years. At the stock market historical average of ~10%, money doubles roughly every 7 years.

Can the Rule of 72 be used for inflation?

Yes. The Rule of 72 can estimate how long it takes for inflation to cut purchasing power in half. At 3% inflation, your money loses half its value in about 24 years (72 ÷ 3 = 24).

Rule of 72 Calculator | How Long to Double Your Money

Rule of 72 Calculator

The Rule of 72 is a simple way to estimate how long it takes for your money to double at a given interest rate.

Formula: Years to Double = 72 ÷ Interest Rate

Quick Reference Table

Interest Rate	Years to Double
2%	36 years
3%	24 years
4%	18 years
5%	14.4 years
6%	12 years
7%	10.3 years
8%	9 years
9%	8 years
10%	7.2 years
12%	6 years
15%	4.8 years

Examples

Example 1: Stock Market Returns

Average stock market returns are approximately 10% per year.

72 ÷ 10 = 7.2 years to double your investment

$10,000 invested today becomes:

$20,000 in ~7 years
$40,000 in ~14 years
$80,000 in ~21 years
$160,000 in ~28 years

Example 2: Savings Account

A high-interest savings account pays 4% interest.

72 ÷ 4 = 18 years to double

Example 3: GIC Investment

A 5-year GIC pays 4.5% interest.

72 ÷ 4.5 = 16 years to double

The Rule of 72 for Inflation

You can also use the Rule of 72 to see how inflation erodes purchasing power:

Inflation Rate	Years to Lose Half Value
2%	36 years
3%	24 years
4%	18 years
5%	14.4 years
7%	10.3 years

At 3% inflation, $100 today will only buy $50 worth of goods in 24 years.

Finding the Required Rate

You can flip the formula to find what rate you need:

Formula: Rate Needed = 72 ÷ Years to Double

Goal	Rate Needed
Double in 5 years	14.4%
Double in 7 years	10.3%
Double in 10 years	7.2%
Double in 15 years	4.8%
Double in 20 years	3.6%

Why 72?

The number 72 is convenient because it has many divisors (1, 2, 3, 4, 6, 8, 9, 12, 18, 24, 36, 72), making mental math easy. The mathematically precise number is actually 69.3 (natural log of 2 × 100), but 72 is close enough and much easier to work with.

Limitations

The Rule of 72 assumes:

Compound interest (interest on interest)
Constant rate of return
No additional contributions or withdrawals

For precise calculations including regular contributions, use our compound interest calculator.

Using the Rule of 72 in a Canadian Context

TFSA Growth Estimates

Because TFSA growth is tax-free, the Rule of 72 applies directly to your after-tax returns — there is no drag from annual tax on gains or interest.

At 8% annual return inside a TFSA:

72 ÷ 8 = 9 years to double
A $30,000 TFSA doubles to $60,000 in 9 years with no tax payable on withdrawal

RRSP Growth Estimates

RRSP investments also grow tax-deferred, so the Rule of 72 works the same way inside the account. The tax hit comes on withdrawal, but the compounding is uninterrupted in the meantime — a major advantage over a taxable account.

GIC Rates vs. Equities

Canadian GICs currently offer 3.5–5% on 1–5 year terms (rates vary by institution and term). Using the Rule of 72:

GIC Rate	Years to Double
3.5%	~20.6 years
4.0%	18 years
4.5%	~16 years
5.0%	14.4 years

By contrast, a diversified Canadian equity portfolio tracking the TSX Composite has returned roughly 7–9% annually over the long run, doubling roughly every 8–10 years.

Compound Interest Calculator — precise projections with regular contributions
TFSA Calculator — model TFSA growth over time
RRSP Calculator — estimate RRSP balance at retirement