Vine
⚡
How investing works

Lesson 32 · Written for kid, teen, and little

The Rule of 72

72 ÷ annual rate estimates years to double at a constant positive rate. Drag the rate and watch.

The idea

The Rule of 72 is an estimate: divide 72 by a constant positive yearly growth rate, written as a percent, to estimate years to double. At a hypothetical 7% annual rate after inflation, 72 ÷ 7 gives about 10 years. This is a model, not a promised market return. The exact doubling time differs because the rule is approximate. Rate and time work together: a higher positive rate shortens a doubling, and more years give compounding more time.

A

Words to know

4

Rule of 72

Divide 72 by your annual growth rate (as a whole number) — that is roughly how many years for money to double. At 8%, 72 ÷ 8 = 9 years.

Growth rate

The percent your money grows each year. $100 becoming $107 is a 7% growth rate.

S&P 500 real return

The S&P 500 follows large U.S. companies. A hypothetical constant 7% annual return after inflation gives a Rule-of-72 estimate of about 10 years to double. This is an assumption, not a historical result or promise.

HYSA

A high-yield savings account pays interest at a rate set by its bank. Rates can change. At a hypothetical constant 4% annual rate before inflation, the Rule of 72 estimates about 18 years to double.

Try it — no accountDrag and watch

Drag the rate slider. See how a boring account beats or loses to a good one.

Years to double

36.0 yrs

Aim for this or less

10.0 yrs

Hypothetical annual rates: 0.5% gives about 144 years; 2% about 36 years; 7% about 10 years under the Rule of 72. This is an approximation, not a bank quote or promised investment return.

Annual return

2%

Move the rate to 7.5% or higher to get the estimated doubling time below 10 years.

Drag a slider to see the shape.

In the full lesson

  1. 1True or false
  2. 2Drag and watch
  3. 3Make the call

Vine has 107 lessons like this one, each written three ways so a 7-year-old and a 17-year-old both get a version that fits.

Free to use

The practice portfolio is open.

Start practicing

More in How investing works