Economy Talk

The rule of 72, the one bit of maths everyone should know

Quick one. Divide 72 by an annual growth rate and you get roughly how many years it takes for something to double.

At 6% a year, money doubles in about 12 years. At 9%, about 8 years. It works in reverse too: at 3% inflation, prices double in about 24 years. That one is less fun.

It's an approximation, not exact, but it's great for sanity-checking any "double your money" pitch. If someone promises doubling in a year, the rule of 72 says that's 72% a year. Run.