In more detail
At 6% it gives 12 years; the exact figure is 11.90. It works best for rates between about 4% and 12% and is handy for mental estimates of inflation as well: at 3% prices double in 24 years.
Glossary
Finance
Rule of 72
The rule of 72 estimates how many years it takes money to double: divide 72 by the annual interest rate in percent.
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See also
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Glossary
Compound interest
Compound interest is interest calculated on the original amount plus all the interest already added, so growth builds on itself.
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Glossary
Inflation
Inflation is the general rise in prices over time, which reduces what each unit of money can buy.