Source: Better Explained

Published: January 2022

### The Rule of 72

The Rule of 72 is a great mental math shortcut to **estimate the effect of any growth rate**, from quick financial calculations to population estimates.

Here’s the formula: Years to double = 72 / Interest Rate

This formula is **useful for financial estimates and understanding the nature of compound interest**.

Examples:

At 6% interest, your money takes 72/6 or 12 years to double.

To double your money in 10 years, get an interest rate of 72/10 or 7.2%.

If your country’s GDP grows at 3% a year, the economy doubles in 72/3 or 24 years.

The rule of 72 shows why a “small” 1% difference in inflation or GDP expansion has a huge effect on forecasting models.

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