Rule of 72 Calculator Formula
Understand the math behind the rule of 72 calculator. Each variable explained with a worked example.
Formulas Used
Years to Double
years_to_double = 72 / interest_rateExact Years (ln2/r)
exact_years = log(2) / log(1 + interest_rate / 100)Variables
| Variable | Description | Default |
|---|---|---|
interest_rate | Annual Interest Rate(%) | 8 |
How It Works
The Rule of 72
Years to Double ≈ 72 / Interest Rate
This is an approximation. The exact formula is:
Years = ln(2) / ln(1 + r)
The Rule of 72 is most accurate for rates between 6% and 10%.
Worked Example
Your investment earns 8% annually.
interest_rate = 8
- 01Rule of 72: 72 / 8 = 9.0 years
- 02Exact: ln(2) / ln(1.08) = 0.6931 / 0.07696 = 9.01 years
Frequently Asked Questions
Why is it called the Rule of 72?
72 is used because it is easily divisible by many common interest rates (1, 2, 3, 4, 6, 8, 9, 12) and provides a close approximation.
Learn More
Guide
Understanding Compound Interest
Learn how compound interest works and why it is the most powerful force in personal finance. Covers the compound interest formula, compounding frequency, the Rule of 72, and real-world applications.
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