DEFINITION of 'Rule Of 72'
A rule stating that in order to find the number of years required to double your money at a given interest rate, you divide the compound return into 72. The result is the approximate number of years that it will take for your investment to double.
INVESTOPEDIA EXPLAINS 'Rule Of 72'
For example, if you want to know how long it will take to double your money at 12% interest, divide 12 into 72 and you get six years.
VIDEO
RELATED TERMS

Compound Interest
Interest calculated on the initial principal and also on the ... 
Stated Annual Interest Rate
The return on an investment that is expressed as a peryear percentage, ... 
Return
The gain or loss of a security in a particular period. The return ... 
Annual Percentage Yield  APY
The effective annual rate of return taking into account the effect ... 
Compounding
The ability of an asset to generate earnings, which are then ... 
Premium to Surplus Ratio
Net premiums written divided by policyholders’ surplus. The premium ...
Related Articles

Retirement
Is it easier to save for retirement if you start earlier in life? Can I make up for what I don't save ...
In general, the earlier you start saving for retirement, the easier it will be to afford, given the number of financial obligations that tend to be incurred at that later period in your life. ... 
Investing Basics
Understanding The Time Value Of Money
Find out why time really is money by learning to calculate present and future value. 
Options & Futures
How Much To Save To Become A Millionaire
With a little discipline and the help of some powerful savings vehicles, anyone can hit this mark. 
Fundamental Analysis
What are the most common issues with Serial Correlation in stocks?
Read about the concept of serial correlation in stock returns, and learn why market analysts are divided about the efficacy of trading based on stock patterns. 
Bonds & Fixed Income
How do I calculate yield to maturity of a zero coupon bond?
Find out how to calculate the yield to maturity for a zero coupon bond, and see why this calculation is more simple than a bond with a coupon. 
Trading Strategies
How far back in a stock's history should you go when gauging its volatility?
Discover why it can be difficult for investors to figure out how far back to go into a stock's history when gauging its volatility. 
Fundamental Analysis
What does the term 'invisible hand' refer to in the economy?
Discover and understand the concept of the "invisible hand" as explained by Adam Smith, considered the founder of modern economic theory. 
Fundamental Analysis
At what level is the current account deficit considered excessive, in terms of percent?
Take a deeper look at the variables that impact current account deficits, and learn why not all types of deficits have equal impacts on a nation's economy. 
Trading Strategies
What are common examples of Serial Correlation in finance?
Take a deeper look at serial correlation in finance, and find out why most attempts at discovering serial correlation among asset prices have failed. 
Fundamental Analysis
What is the difference between yield and rate of return?
Read about the differences between yield and rate of return. See why many novice investors often struggle more with the concept of yield.