What is the 'Rule Of 70'
The rule of 70 is a means of estimating the number of years it takes for a certain variable to double. 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.
The rule of 70 is also referred to as doubling time.
BREAKING DOWN 'Rule Of 70'
A useful application of the rule of 70 is in the area of estimating how long it would take a country's real Gross Domestic Product (GDP) to double. Similar to calculating compound interest rates, a person can use the GDP growth rate in the divisor of the rule. For example, if the growth rate of China is 10%, the rule of 70 predicts it would take seven years, or 70/10, for China's real GDP to double.
The rule of 70 is accepted as a way to manage exponential growth concepts without complex mathematical procedures. It is most often related to items in the financial sector when examining the potential growth rate of an investment. By dividing the number 70 by the expected rate of growth, or return in financial transactions, an estimate in years can be produced.
While it is not a precise estimate, the rule of 70 formula does help provide guidance when dealing with issues of compounding interest and exponential growth. This can be applied to any instrument where steady growth is expected over the long term, such as with population growth over time. However, the rule is not well applied in instances where growth rate is anticipated to vary dramatically.
Rules of 72 and 69
In some instances, the rule of 72 or the rule of 69 is used. The function is the same as the rule of 70 but uses the number 72 or 69, respectively, in place of 70 in the calculations. While the rule of 69 is often considered more accurate when addressing continuous compounding processes, 72 may be more accurate for less frequent compounding intervals. Often, the rule of 70 is used simply because it may be easier to remember.
Rule of 70 vs. Real Growth
The population of the United States was estimated at 161 million in 1953, approximately doubling to 321 million in 2015. In 1953, the growth rate was listed as 1.66%. By the rule of 70, the population would have doubled by 1995. Changes to the growth rate lowered the average rate, making the rule of 70 calculation inaccurate.

Rule Of 72
The rule of 72 is a shortcut to estimate the number of years ... 
Call Rule
The call rule is a rule for trading markets that makes the next ... 
Continuous Compounding
Continuous compounding is the process of calculating interest ... 
Compounding
Compounding is the process in which an asset's earnings, from ... 
Double Up
Double up is an investing strategy in which a trader doubles ... 
2% Rule
The 2% rule is a money management strategy where an investor ...

Financial Advisor
Ready for the Fiduciary Rule? You Should Be
Despite the opposition it faces, advisors should still plan to comply with the fiduciary rule. Here's why. 
Investing
How To Double Your Money Every 6 Years
Investing according to the rule of 72 is a good starting point for achieving your saving goals. 
Financial Advisor
What Advisors Need to Know About Rule 3210
Here's what advisors and brokers need to know about FINRA Rule 3210. 
Personal Finance
Financial Rules of Thumb: Harmful or Helpful?
While financial rules of thumb can be helpful at times, they can also be dangerously wrong. 
Investing
Learn simple and compound interest
Interest is defined as the cost of borrowing money or the rate paid on a deposit to an investor. Interest can be classified as simple interest or compound interest. 
Investing
Understanding the Power of Compound Interest
Understanding compound interest is important for both investing and borrowing money. 
Financial Advisor
Indie BDs: Trump Should Drop the Fiduciary Rule
A majority of independent brokerdealers want Trump to repeal the fiduciary rule, a recent survey reveals. 
Investing
5 Top Ways to Double Your Investment
From risky maneuvers to slowandsteady strategies, we look at five ways to double your money. Learn the right and wrong ways to invest for big returns. 
Financial Advisor
Why FeeBased Variable Annuities Are Coming Back
The DOL rule may lead to sweeping changes in the retirement planning industry, and there will likely be more use of feebased annuity products. Here's why. 
Financial Advisor
Lawsuits Aim to Overturn DOL's Fiduciary Rule
Five lawsuits have aimed to overturn the DOL fiduciary rule introduced in 2016.

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 >> 
How do I use the rule of 72 to calculate continuous compounding?
Find out why the rule of 72 does not accurately reflect the growth caused by continuous compounding, and which number can ... Read Answer >> 
What formula calculates interest on interest?
Find out about compounding interest, what it measures, and how to calculate the amount of compound interest accrued using ... Read Answer >> 
What is the difference between stated annual return and effective annual return?
Essentially, the effective annual return accounts for intrayear compounding, and the stated annual return does not. Read Answer >>