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Rule of 72 & Compound Doubling Calculator Formula Breakdown
Mathematical constant providing a close mental approximation of natural logarithm doubling for interest rates between 5% and 12%.
Expected Compound Annual Growth Rate (CAGR) or dividend reinvestment yield.
Continuous exponential compounding equation: t = ln(2) / ln(1 + r/100).
Time required to achieve a 4x return on initial capital (2 × Doubling Period).
Time required to achieve an 8x return on initial capital (3 × Doubling Period).
How to Calculate Rule of 72 Step-by-Step
Input expected annual return (CAGR) or retrieve the historical earnings/revenue growth rate of a stock.
Calculate the Rule of 72 approximation: 72 divided by the annual growth rate.
Calculate the exact continuous compounding doubling timeline using natural logarithms.
Compute capital quadrupling (4x) and octupling (8x) milestones.
Generate the multi-decade wealth compounding table from Year 1 through Year 30.
How to Interpret the Result
Frequently Asked Questions
What is the Rule of 72 in finance?
The Rule of 72 is a quick, famous mathematical shortcut used to estimate how long an investment will take to double at a given annual compound interest rate.
How accurate is the Rule of 72 compared to exact math?
For interest rates between 6% and 10%, the Rule of 72 is remarkably accurate (within a fraction of a month of the exact logarithmic solution ln(2)/ln(1+r)).
How can I double my money in 5 years?
Using the Rule of 72 (72 / 5 = 14.4%), you need an annualized compound return of approximately 14.4% to double your money in 5 years.
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