As engineer, I have been trained in many things that some consider not so engineer-ish, but actually are. Economics is one of these. Needless to say, engineers care very much about economics. Frugality is our middle name, or at least one of them. Today’s number comes from economics, and engineers learned of it in a course called something like “Engineering Economics.”

72 is a great number to use for quick calculations, and since engineers are always tending to run numbers in their heads, then 72 is a good number for the engineer. The rule of 72 simply states that for percents of compounding interest, divide the interest rate into 72 and you will roughly get the number of years it takes to double the number (e.g. money invested). So, at 8% interest, $100 would turn into $200 in 72/8 = 9 years.

This is just an estimation and if one uses an interest rate that is very low or very high, then the accuracy of the estimation is, in engineering language, “not as good”. But for quick calculations, 72 works fine. Some may say there is a rule of 70 or 69, and they may yield better results at certain interest rate ranges, but these are estimations, people. Just use 72. It has a lot of numbers that divide into it evenly, and gives fairly close results, for estimations.

72 is a number that has power for the engineer because it 1) is good for running numbers in your head, 2) deals with money, 3) is divisible by a number of numbers, and 4) is just plain useful.

Now, I just have to find an investment that pays 8%, with no risk.