Compound interest math involves an exponent, which isn't something most people can do in their head. But there's a shortcut that's been used for centuries to get a close answer instantly: the Rule of 72.
The rule itself
Divide 72 by your annual growth rate, and the result is roughly how many years it takes for a sum of money to double. At 8% annual returns, 72 divided by 8 is 9 -- so money growing at 8% a year roughly doubles in 9 years. At 6%, it's 12 years. At 12%, it's 6 years. No exponents, no calculator -- just one division.
Why it works (approximately)
The actual formula for doubling time involves natural logarithms: it's ln(2) / ln(1 + r). That's not mental-math friendly. But for the range of interest rates most people actually deal with -- roughly 3% to 15% -- that formula stays close enough to 72 / r that the shortcut is accurate to within a few months of the real answer. 72 was chosen over the mathematically "purer" 69.3 (which is ln(2) x 100) specifically because 72 divides evenly by more small numbers -- 2, 3, 4, 6, 8, 9, 12 -- which makes the mental math even easier.
Where it breaks down
The approximation gets worse at the extremes. At very low rates (say, 1-2%), it's still fine. At very high rates -- 25%, 30%, the kind of numbers that show up in credit card APRs or aggressive growth projections -- the gap between the Rule of 72 and the real doubling time widens noticeably, and you'd want the exact calculation instead of the shortcut. It also assumes a fixed, unchanging annual rate compounding every year, which is a simplification -- real investments fluctuate year to year, and the rule only tells you about doubling time, not the actual path the money takes to get there.
It works for debt too
The same math runs in both directions. If you're carrying a balance at 18% interest and never pay it down, the Rule of 72 says that balance roughly doubles every 4 years (72 / 18 = 4). Seeing it framed as "doubling time" rather than just "18% APR" tends to make the cost of high-interest debt feel more concrete than the percentage alone does.
Getting the exact number
The Rule of 72 is meant for a fast estimate, not a final answer -- when the actual number matters, run the real calculation. The Interest Calculator computes exact compound interest for any principal, rate, and time period, and the SIP Calculator does the same for recurring mutual fund investments, showing you the precise maturity amount instead of a rounded-off estimate.