Rule of 70 is an estimation of assessing the number of years to double the rate of return or growth rate. We simply divide 70 with the current growth rate to get the number of years to double the growth rate. The formula for the rule of 70 is as follows:
Years to double the rate = 70 / current rate of return
Assume that the current growth rate of a company is 5%, to estimate the number of years to double this growth rate can be estimated using the rule of 70 formula.
Years to double the growth rate = 70 / current rate of growth
Years to double the growth rate = 70 / 5 = 14 years
From the formula above it is estimated that the company will achieve a growth rate of 10% after 14 years of time. Although it is a rough estimate yet it is very effective.
Purchasing-power parity holds between the nations of Ectenia and Wiknam
Bond A pays $8,000 in 20 years. Bond
Why are the Rule of 70 and the ratio scale useful tools
Bond A pays $8,000 in 20 years. Bond
A mathematical approximation called the rule of 70 tells us that the
Plot the following scenarios for per capita GDP on a ratio scale
Use the Rule of 70 to calculate the growth rate that leads
