Key Takeaway: Years to Double = 72 ÷ Return Rate. At 8% your money doubles every 9 years. At 12% every 6 years.
The Formula
Years to Double = 72 ÷ Interest Rate That's it. One division. Used by Warren Buffett and top investors worldwide.
Quick Reference
• 2% return: 36 years (savings account) • 4%: 18 years (bonds) • 6%: 12 years (conservative portfolio) • 8%: 9 years (balanced portfolio) • 10%: 7.2 years (stock market avg) • 12%: 6 years (Indian equity funds) • 15%: 4.8 years (aggressive stocks)
Real Example: $10,000 at 10%
Doubles every 7.2 years: • Year 0: $10,000 • Year 7: $20,000 • Year 14: $40,000 • Year 21: $80,000 • Year 28: $160,000 • Year 35: $320,000
The Reverse Rule
Need return rate? → Required Return = 72 ÷ Years • Double in 5 years? Need 14.4% return • Double in 10 years? Need 7.2% return • Double in 3 years? Need 24% return
Rule of 72 for Inflation
Works for price doubling too: • 🇮🇳 India (6%): Prices double in 12 years • 🇺🇸 US (3%): Prices double in 24 years • 🇬🇧 UK (4%): Prices double in 18 years Something costing ₹100 today = ₹200 in 12 years at 6% inflation!