What is the Rule of 72?
Divide 72 by your annual return to estimate how long money takes to double. At 8% return, money doubles in ~9 years.
Calculate how your money grows with compound interest. Enter principal, rate, and time to see future value with monthly or annual compounding.
A = P(1 + r/n)^(n·t), where P = principal, r = annual rate, n = compounding periods/year, t = years.
$10,000 at 7% compounded monthly for 10 years: A = 10,000 × (1 + 0.07/12)^(120) ≈ $20,097 — a $10,097 gain from compounding alone.
Divide 72 by your annual return to estimate how long money takes to double. At 8% return, money doubles in ~9 years.
More frequent compounding earns slightly more. On $10,000 at 7% for 10 years, annual gives $19,672, monthly $20,097, daily $20,136 — differences shrink at lower rates.
Yes — credit card balances compound daily against you. A 22% APR balance doubles in ~3.3 years if untouched.
The S&P 500's long-run average is ~10% nominal, ~7% inflation-adjusted. Use 6–7% for conservative projections.
Even $200/month at 8% for 30 years grows to ~$300,000. Consistency matters more than amount when starting.