The rule of 72, and three other shortcuts worth memorising
Four pieces of arithmetic you can do in your head that replace most of what people reach for a calculator to work out.
You will not always have a spreadsheet open when someone quotes you a rate. These four shortcuts cover most of what you actually need in the moment.
1. Rule of 72 — how long money doubles
Divide 72 by the annual rate. That is roughly the number of years to double.
At 12%, money doubles every six years. Over 30 years that is five doublings — 32 times the starting amount. This is why apparently small rate differences produce absurd end gaps.
The approximation holds to within a few percent for rates between roughly 4% and 15%.
2. Rule of 114 — how long money triples
Same idea, different numerator. 114 ÷ rate is roughly the years to triple. At 9%, about 12.7 years.
3. Rule of 70 — what inflation destroys
70 ÷ inflation rate gives the years for prices to double, which is the same as the years for your purchasing power to halve. At 6% inflation, prices double in about 12 years. A ₹50,000 monthly lifestyle costs ₹1,00,000 by then.
4. The 25× rule — what it takes to stop working
Annual expenses × 25 is a rough corpus that can support them indefinitely at a 4% withdrawal rate. Spending ₹8 lakh a year means about ₹2 crore. It is a starting frame rather than a plan: it assumes a long horizon, a mixed portfolio, and no large one-off costs later.
One bonus: the 1% EMI check
For a 20-year home loan at typical rates, the monthly EMI is close to 1% of the loan amount. A ₹50 lakh loan means roughly ₹50,000 a month. Useful for sanity-checking a broker's number before you get anywhere near a term sheet.
Check the shortcuts
Open the compound interest calculator
Published by FinClamp. This guide is information, not financial advice — see the disclaimer.