Calculate how long it’ll take to save double (Rule of 72)

A lot of you die-hard PF’ers will have already known this, but The Rule of 72 bears mentioning.

Whatever number you are looking at, and divide the number ’72’ by the interest rate.

The number you get at the end, will be how long it will take for the number to double.

E.g. I have $10,000. How long will it take for it to be turned into $20,000 with an interest rate of 3% compounding annually?

72/3% = 24 years

You can also use it to figure out what interest rate you’ll need.

E.g. I have $10,000 and I want it to double in 5 years, what interest rate do I need?

72/5 years = 14.4%

Try it out for yourself!

About the Author

Just a girl trying to find a balance between being a Shopaholic and a Saver. I cleared $60,000 in 18 months earning $65,000 gross/year. Now I am self-employed, and you can read more about my story here, or visit my other blog: The Everyday Minimalist.