The Rule of 72: how fast does your money double?

The formula

Years to double = 72 ÷ annual return (%). That is the whole rule. At a 6% return, money doubles in about 72 ÷ 6 = 12 years. At 9%, about 8 years. At 12%, about 6 years.

It works in reverse too. If you want your money to double within 10 years, you need roughly a 72 ÷ 10 = 7.2% annual return. That reverse form is useful for sanity-checking a goal: if a plan requires doubling every 4 years, it is implicitly assuming an 18% annual return, which should set off alarm bells.

Worked examples in CAD

Take $10,000 invested once and left alone:

The jump between rows is the part worth staring at. Moving from 6% to 8% does not improve the outcome by a third; over 24 years it improves it by more than half, because a higher rate does not just grow money faster, it fits more doubling cycles into the same window.

Why 72 works

The exact doubling time comes from logarithms: years = ln(2) ÷ ln(1 + r), where ln(2) is about 0.693. For returns in the typical investing range, that formula is closely approximated by 72 ÷ r, and 72 happens to be a wonderfully convenient number because it divides cleanly by 2, 3, 4, 6, 8, 9, and 12. Mathematicians sometimes prefer the Rule of 69.3 for precision, but 69.3 divides cleanly by almost nothing, which is why 72 won.

The approximation is tightest between roughly 5% and 10% annual returns, which conveniently covers most realistic long-term portfolio assumptions. At very low or very high rates it drifts: at 1% the true doubling time is about 70 years, not 72, and at 20% it is closer to 3.8 years than 3.6. For mental math, the drift rarely matters.

What doubling cycles say about starting early

Here is the uncomfortable part. At an 8% return, a 25-year-old investing until 65 gets about four and a half doubling cycles. A 35-year-old gets about three and a third. The decade of delay does not cost one decade of growth; it costs the final doubling, which is the largest one in dollar terms because it doubles the biggest balance.

Concretely: $20,000 invested at 25 and left at 8% becomes roughly $435,000 by 65. The same $20,000 invested at 35 becomes roughly $201,000. The missing decade cost more than the original stake several times over. This is the entire argument for starting with whatever amount you have rather than waiting until you can invest more. Our guide to DCA vs lump sum investing covers the related question of how to deploy money once you have it.

The rule's limitations

It also ignores ongoing contributions entirely. The rule describes one lump of money doubling; a portfolio you add to every month grows on a different and happier curve.

Try it on the interactive slider

Then take the next step: our free compound interest calculator shows the full curve, including monthly contributions, in Canadian dollars.

Frequently asked questions

Is the Rule of 72 exact?

No. It is an approximation of a logarithmic formula. It is accurate to within a few months for returns between about 5% and 10%, which covers most long-term planning assumptions.

Does it work for inflation and debt?

Yes, the math is symmetric. At 3% inflation, prices double in about 24 years. A debt compounding at 18% doubles in about 4 years, which is the strongest argument the rule makes against carrying credit card balances.

What return should I use?

That depends entirely on what you hold. The reference table on our Learn page lists historical ranges for common Canadian-accessible assets, from savings accounts to all-equity ETFs.