A shortcut: divide 72 by annual return % to estimate years until money doubles.
The Rule of 72 is a simple mental math trick to estimate how long it takes an investment to double at a given annual return rate. Divide 72 by the annual return percentage. At 7% annual return, 72÷7≈10 years to double. At 6%, 72÷6=12 years. The rule works well for returns between 1% and 10%; outside that range, accuracy decreases. For example: savings at 4% APY doubles in 18 years (72÷4); stocks historically at 10% double in 7.2 years (72÷10). The Rule of 72 illustrates compound interest power: small differences in annual returns create dramatically different doubling times, which is why even small differences in fees and returns matter enormously over decades. The rule is attributed to Einstein, though the actual origin is unclear.