Reckonary / Finance / Rule of 70 vs 72
Rule of 70 vs Rule of 72: which one should you use?
Two shortcuts promise the same thing — divide a number by your growth rate and get the years to double. At 8% the Rule of 72 misses the true answer by about four days over nine years. Drop to 2% and suddenly the Rule of 70 is the perfect one.
What's the difference between the Rule of 70 and the Rule of 72?
Only the number on top. Both rules estimate doubling time by dividing a constant by the annual growth rate: 70 ÷ rate or 72 ÷ rate. Below about 5% growth — inflation, GDP, population — the Rule of 70 lands closer to the true answer. From 5% up — investment territory — the Rule of 72 takes over, and it stays the better pick through the mid-teens.
So the question isn't which rule is right. Both are deliberate roundings of the same underlying number, chosen for different speeds of growth. Knowing which regime you're in is the whole skill.
Where do 70 and 72 come from?
The honest constant is 69.3 — that's what the mathematics of doubling produces, and it is exactly right when growth compounds every instant, the way a textbook curve does. Real money doesn't do that. Interest posts once a year, and that small delay stretches the true doubling time a little past what 69.3 predicts — and stretches it more as the rate climbs.
You can watch the stretch happen. At 1% growth, money doubles in 69.66 years — almost exactly 69.3. At 8%, the true answer is 9.01 years, while 69.3 ÷ 8 predicts 8.66. The truth crept upward, and 72 ÷ 8 = 9.0 catches it almost perfectly. The Rule of 72 isn't lazier math than 69.3 — it quietly bakes the once-a-year correction in, tuned for the rates investors actually see.
Try both rules at 8%, then at 2%
Say a fund returns 8% a year. The Rule of 70 says 70 ÷ 8 = 8.75 years to double; the Rule of 72 says 72 ÷ 8 = 9.0. The exact answer is 9.01 years — the Rule of 72 misses by 0.01 years, roughly four days, while the Rule of 70 runs about three months short.
Now price inflation at 2%. The Rule of 70 says 70 ÷ 2 = 35.0 years for prices to double, and the exact answer is 35.00 — dead on. The Rule of 72 says 36, a full year high. Same two rules, opposite winners. Drag the rate below and watch the lead change hands at 5%.
Pick a growth rate and see which rule lands closer to the true doubling time — the shorter the bar, the smaller the miss:
Slide below 5% and the Rule of 70 takes the lead; from 5% up, the Rule of 72 wins — at 8% it misses nine years of doubling by only days.
Which rule is more accurate at which rate?
Here is the whole picture, computed against the exact doubling time with once-a-year compounding. The crossover sits at 5%: below it, reach for 70; at 5% and above, reach for 72.
| Growth rate | Rule of 70 | Rule of 72 | Exact | Closer rule |
|---|---|---|---|---|
| 1% | 70.0 yr | 72.0 yr | 69.66 yr | 70 |
| 2% | 35.0 yr | 36.0 yr | 35.00 yr | 70 |
| 3% | 23.33 yr | 24.0 yr | 23.45 yr | 70 |
| 4% | 17.5 yr | 18.0 yr | 17.67 yr | 70 |
| 5% | 14.0 yr | 14.4 yr | 14.21 yr | 72 |
| 6% | 11.67 yr | 12.0 yr | 11.90 yr | 72 |
| 8% | 8.75 yr | 9.0 yr | 9.01 yr | 72 |
| 10% | 7.0 yr | 7.2 yr | 7.27 yr | 72 |
| 12% | 5.83 yr | 6.0 yr | 6.12 yr | 72 |
| 15% | 4.67 yr | 4.8 yr | 4.96 yr | 72 |
Notice the shape of the errors. The Rule of 70 is never off by more than about a third of a year on this whole table — it just always runs a touch low once rates pass 5%. The Rule of 72's misses are bigger at low rates but shrink to almost nothing right where investment returns live.
So why does everyone teach the Rule of 72?
Because 72 is the friendliest number in arithmetic. It divides cleanly by 2, 3, 4, 6, 8, 9, and 12 — which covers most rates you'd ever ask about, no calculator needed. Seventy only divides neatly by 2, 5, 7, and 10. A shortcut you can't do in your head isn't a shortcut.
The split survives in classrooms: economics courses lean on 70 because GDP and inflation live in the 1–4% range it handles best, while finance courses lean on 72 because returns live in its sweet spot. If you only remember one, remember 72 for money you invest and 70 for prices and economies — or skip the constants entirely and let the calculator do the exact version.
See your own doubling time for any return, exactly:
Open the Rule of 72 calculator →New to the doubling shortcut itself? Start with The Rule of 72, learned by doing — it builds the intuition this article assumes.
Frequently asked questions
Is there really a Rule of 69.3?
Yes — 69.3 is the number the math actually produces, and some textbooks teach it as the Rule of 69.3. It is exact when growth compounds continuously, which almost nothing in ordinary life does. Once growth compounds yearly, the true doubling time drifts upward, which is why the rounder 70 and 72 usually land closer in practice — and are far easier to divide in your head.
Which rule should I use for inflation?
The Rule of 70. Inflation usually runs in the 2–4% range, where 70 is the more accurate constant: at 3% inflation, prices double in about 23.3 years by the rule, and the exact answer is 23.4. A doubling of prices is the same thing as your money losing half its buying power.
Which rule should I use for investment returns?
The Rule of 72. Long-run investment returns tend to sit between 5% and 12%, and in that range 72 beats 70 every time — at 8% it lands within days of the exact answer. It also divides cleanly by 6, 8, 9, and 12, which is what makes it usable without a calculator.
Why does my economics class use 70 but my finance class uses 72?
Each field tuned the shortcut to the growth rates it stares at. Economists work with GDP growth, inflation, and population — typically 1–4%, where 70 is more accurate. Finance people work with returns of 5–12%, where 72 is more accurate. Both are the same trick wearing different constants.
Last reviewed July 2026. Exact doubling times use once-a-year compounding; figures are rounded to two decimals. This guide is for education, not financial advice.