Investopedia

Rule Of 70

Filed Under » ,
Dictionary Says

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 Says

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.

Articles Of Interest

  1. Why Leveraged Investments Sink

    This powerful tool can have you swimming in money or drowning in underwater equity.
  2. For IRAs, Time Is Money

    Don't procrastinate. The timing of your contributions can mean thousands more in savings.
  3. Accelerating Returns With Continuous Compounding

    Learn the natural log and exponential functions used to calculate this value.
  4. Top 4 Reasons To Save For Retirement Now

    No more excuses. Make sure you are financially secure and independent for your golden years.
  5. Quants: The Rocket Scientists Of Wall Street

    Blend math, finance and computer skills to command a high - and well deserved - salary.
  6. Calculating The Means

    Learn more about the different ways you can calculate your portfolio's average return.
  7. R-Squared

    Learn more about this statistical measurement used to represent movement between a security and its benchmark.
  8. Mitigating Downside With The Sortino Ratio

    Differentiate between good and bad volatility with the Sortino Ratio.
  9. Quantitative Analysis Of Hedge Funds

    Hedge fund analysis requires more than just the metrics used to analyze mutual funds.
  10. How To Use Facebook As A Marketing Tool

    Facebook can be a viable marketing platform for your business. It can even earn you revenue.
comments powered by Disqus
Marketplace
Hot Definitions
  1. Fool In The Shower

    The notion that changes or policies designed to alter the course of the economy should be done slowly, rather than all at once.
  2. Pattern Day Trader

    An SEC designation for traders who trade the same security four or more times per day (buys and sells) over a five-day period, and for whom same-day trades make up at least 6% of their activity for that period.
  3. Cost-Push Inflation

    A phenomenon in which the general price levels rise (inflation) due to increases in the cost of wages and raw materials.
  4. Happiness Economics

    The formal academic study of the relationship between individual satisfaction and economic issues, such as employment and wealth.
  5. Affluenza

    A social condition arising from the desire to be more wealthy, successful or to "keep up with the Joneses." Affluenza is symptomatic of a culture that holds up financial success as one of the highest achievements.
  6. Icarus Factor

    The term Icarus factor describes a situation where managers or executives initiate an overly ambitious project which then fails. Fueled by excitement for the project, the executives are unable to reign in their misguided enthusiasm before it is too late to avoid the failure.
Trading Center