DEFINITION of 'Rule Of 70'
A way to estimate the number of years it takes for a certain variable to double. The rule of 70 states that in order to estimate the number of years for a variable to double, take the number 70 and divide it by the growth rate of the variable. This rule is commonly used with an annual compound interest rate to quickly determine how long it would take to double your money.
INVESTOPEDIA EXPLAINS 'Rule Of 70'
Another useful application of the rule of 70 is in the area of estimating how long it would take a country's real GDP to double. Similar to compound interest rates, one can use the GDP growth rate in the divisor of the rule. For example, if the growth rate of the China is 10%, the rule of 70 predicts it would take 7 years (70/10) for China's real GDP to double.
VIDEO
Loading the player...
RELATED TERMS

Consumer Price Index  CPI
A measure that examines the weighted average of prices of a basket ... 
Real Gross Domestic Product (GDP)
An inflationadjusted measure that reflects the value of all ... 
Inflation
The rate at which the general level of prices for goods and services ... 
Aggregate Hours
The sum of the hours worked by all employed people, either full ... 
Altman ZScore
The output of a creditstrength test that gauges a publicly traded ... 
Compound Annual Growth Rate  CAGR
The yearoveryear growth rate of an investment over a specified ...
RELATED FAQS

What does the rule of 70 indicate about a country's future economic growth?
The rule of 70 could be used to indicate the approximate number of years that it would take a company's economic growth to ... Read Full Answer >> 
How is the rule of 70 related to the growth rate of a variable?
The rule of 70 is related to the growth rate of a variable because it uses the growth rate in its approximation of the number ... Read Full Answer >> 
How can I use the rule of 70 to estimate a country's GDP growth?
You could use the rule of 70 to estimate a country's gross domestic product (GDP) growth by dividing 70 by the expected GDP ... Read Full Answer >> 
What is the difference between the rule of 70 and the rule of 72?
The rule of 70 and the rule of 72 give rough estimates of the number of years it would take for a certain variable to double. ... Read Full Answer >> 
What is a "linear" exposure in Value at Risk (VaR) calculation?
A linear exposure in the valueatrisk, or VaR, calculation is represented by positions in stocks, bonds, commodities or ... Read Full Answer >> 
What is the criteria for a simple random sample?
Simple random sampling is the most basic form of sampling and can be a component of more precise, more complex sampling methods. ... Read Full Answer >>
Related Articles

Investing Basics
What is the Rule of 70?
The rule of 70 is an easy way to calculate how many years it will take for an investment to double in size. 
Retirement
Top 4 Reasons To Save For Retirement Now
No more excuses. Make sure you are financially secure and independent for your golden years. 
Bonds & Fixed Income
Accelerating Returns With Continuous Compounding
Investopedia explains the natural log and exponential functions used to calculate this value. 
Options & Futures
Why Leveraged Investments Sink
This powerful tool can have you swimming in money or drowning in underwater equity. 
Retirement
For IRAs, Time Is Money
Don't procrastinate. The timing of your contributions can mean thousands more in savings. 
Investing
The Strong Dollar’s (Real) Toll On Tech Stocks
A large portion of U.S. technology companies’ sales occur overseas, given the strong international business and consumer demand from many U.S. tech firms. 
Fundamental Analysis
How to Calculate a Coverage Ratio
In broad terms, the higher the coverage ratio, the better the ability of the enterprise to fulfill its obligations to its lenders. 
Economics
The 10 Best Cities for Financial Advisors
If you're an advisor looking for a promising location to practice, consider the combination of high wealth and low market penetration of these locales. 
Economics
The Worst Cities for Financial Advisors
Financial advisors may want to avoid low income areas or those with lofty wealth but high numbers of advisors. 
Fundamental Analysis
Calculating the HerfindahlHirschman Index (HHI)
The HerfindhalHirschman Index, (HHI) is a measure of market concentration and competition among market participants.