Why divide 72 by the rate?
The Rule of 72 is a mental-math shortcut. Divide 72 by a percentage return to approximate the number of years required to double. It is most useful for ordinary positive rates and becomes less precise at unusually high rates.
Rule of 72: years ≈ 72 ÷ rate
Exact: years = ln(2) ÷ ln(1 + rate)
Exact: years = ln(2) ÷ ln(1 + rate)
Use it as a quick check
The result is a comparison tool, not a promise. Investment returns vary from year to year, and fees, taxes and inflation affect real purchasing power.