The Rule of 72 is one of the most useful shortcuts in personal finance. It tells you, almost instantly and without a calculator, roughly how many years it will take for your money to double at a given interest rate.
It's not perfectly precise — but it's close enough to be genuinely useful for quick comparisons, back-of-envelope planning, and understanding the real cost of inflation.
One formula. Instant insight.
Divide 72 by your annual interest rate and you have your doubling time. It works for investments growing your money — and equally for debt or inflation eating it away. Same maths, opposite direction.
Check your doubling time →The Formula
Divide 72 by your annual interest rate:
That's it. If your investment earns 9% per year, your money doubles in roughly 72 ÷ 9 = 8 years. If it earns 6%, it doubles in 72 ÷ 6 = 12 years.
Doubling Times at Common Rates
Here's how the rule plays out across the rates most relevant to South African investors in 2026:
| Annual Return | Years to Double | Typical SA Context |
|---|---|---|
| 5% | 14.4 years | High-yield savings account |
| 7% | 10.3 years | Money market / fixed deposit |
| 9% | 8.0 years | Conservative equity portfolio |
| 10% | 7.2 years | JSE All Share (long-term average) |
| 12% | 6.0 years | Aggressive equity / small cap |
| 22% | 3.3 years | Credit card debt — working against you |
That last row is worth sitting with. The same rule that tells you your investment doubles in 7 years at 10% also tells you that unpaid credit card debt at 22% doubles in just over 3 years.
Compound interest works both ways
At 22%, credit card debt doubles in 3.3 years. A balance of R15,000 left untouched becomes R30,000 before you've barely noticed. The Rule of 72 is the fastest way to see how urgently debt needs to be cleared.
Model your payoff scenario →A South African Rand Example
You invest R50,000 in a diversified equity ETF returning an average of 10% per year. Using the Rule of 72:
72 ÷ 10 = 7.2 years to double. So the milestones look like this:
| After approximately | Your R50,000 becomes |
|---|---|
| 7 years | ~R100,000 |
| 14 years | ~R200,000 |
| 21 years | ~R400,000 |
| 28 years | ~R800,000 |
That's a single lump sum — no additional contributions — growing to 16× its original value over 28 years. The doubling interval stays constant as long as the rate stays constant, which is why the Rule of 72 reveals the exponential pattern so clearly.
Using It to Understand Inflation
The Rule of 72 works in reverse too. If South Africa's inflation rate is running at 5.5%, then the purchasing power of R100,000 in cash halves in approximately 72 ÷ 5.5 = 13 years.
This is why leaving large sums in a standard bank account — even one paying 5% interest — quietly erodes your wealth when real inflation is at 5.5%. Your balance grows in nominal terms. Your purchasing power shrinks.
Use the inflation adjustment toggle in the CompoundCalc calculator to see this effect applied to your own projection.
Inflation has a doubling time too
At 5.5% inflation, the purchasing power of cash halves every 13 years. Sitting in a savings account paying less than inflation doesn't feel dangerous — but the Rule of 72 shows exactly how slowly and steadily the gap grows.
See the inflation toggle →How Accurate Is the Rule?
Very accurate for rates between 6% and 12%. Outside that range it drifts slightly — at very high rates, 69.3 (derived from the natural log of 2) is more precise. But for everyday planning, 72 is close enough and far easier to divide mentally.
| Rate | Rule of 72 (years) | Exact (years) | Difference |
|---|---|---|---|
| 3% | 24.0 | 23.4 | +0.6 |
| 6% | 12.0 | 11.9 | +0.1 |
| 9% | 8.0 | 8.0 | Exact ✓ |
| 12% | 6.0 | 6.1 | −0.1 |
| 20% | 3.6 | 3.8 | −0.2 |
At 9%, the rule is exact. It's deliberately tuned for that range — which happens to overlap closely with long-run South African equity returns.
The Connection to CompoundCalc's Milestone Badges
When you run a calculation in the Grow Savings tab, CompoundCalc shows you milestone badges — the exact year your balance hits 2×, 5×, and 10× your initial investment. The 2× badge is the Rule of 72 in action, calculated precisely from your exact inputs rather than the approximation.
For quick mental estimates before running the full projection, the Rule of 72 is your starting point. For the precise figure, the calculator does the rest.
Check your own doubling time →