Rule Of 70

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What is the 'Rule Of 70'

The rule of 70 is 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.

BREAKING DOWN '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.

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RELATED FAQS
  1. What is the difference between the rule of 70 and the rule of 72?

    Find out more about the rule of 70 and the rule of 72, what the two rules measure and the main difference between them. Read Answer >>
  2. How is the rule of 70 related to the growth rate of a variable?

    Find out more about the rule of 70, what it is used for and how it is related to the growth rate of a variable. Read Answer >>
  3. How can I use the rule of 70 to estimate a country's GDP growth?

    Find out about the rule of 70, what it is used for and how to use it to determine the number of years a country's GDP takes ... Read Answer >>
  4. What can I use the Rule of 70 for?

    Discover how the rule of 70 works, and learn about some of the different ways it can be applied to future forecasting and ... Read Answer >>
  5. How do I use the rule of 72 to calculate continuous compounding?

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  6. How do I use the rule of 72 to estimate compounding periods?

    Find out how and why you can use the rule of 72 to approximate the amount of time it will take for an investment to double ... Read Answer >>
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