Question 1

What is the Rule of 72?

Accepted Answer

A shortcut: divide 72 by the annual return % to estimate the years to double your money. At 6% it's ~12 years; at 12% ~6 years. It's an approximation of the compounding math, accurate enough for quick estimates.

Question 2

How accurate is it?

Accepted Answer

Very close for rates between about 5% and 15%. For very high or very low rates it drifts a little, but it's a great mental tool for grasping how fast (or slow) compounding works.

Regel-72-Rechner

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