**The formula for determining how long it takes to double your money is a bit tricky. Luckily, there is a simple shortcut that’s surprisingly accurate.**

Let’s take a little trip back to high school and do some basic algebra. We’re going to assume a deposit of $1,000 and an annual growth rate of 5%. How long would it take to double our money?

$1,000 * 1.05^{x} = $2,000. Where x = the amount of years, $1,000 is our initial deposit and $2,000 is our target of doubling our money.

Dividing both sides by $1,000, we simplify to 1.05^{x} = 2. Great, we now require logarithms to solve this.

**log 2 / log 1.05 = 14.2 years.**

Certainly not the stuff you’d want to do on the top of your head.

## Logarithms suck

Let’s introduce a simple guideline that will make your life a whole lot easier:

Divide 70 by the annual interest rate to get an approximation of how many years it would take to double your money

Let’s use our example: 70 divided by the 5% annual interest rate gives us:

** 70/5 = 14 years.**

As you can see, the calculation is only 0.2 years off. Not bad for such a simple rule!

## Testing our new rule

Below you’ll find a table of results in which we test the rule of 70 against the actual number. You’ll see that percentage-wise, the error margin increases as the interest rises. For quick and dirty off-the cuff calculations though, the rule of 70 should work just fine for interest rates at and below 10%.

Interest rate | Actual time to double (years) | Rule of 70 |
---|---|---|

1.0% | 69.7 | 70 |

2.0% | 35 | 35 |

3.0% | 23.4 | 23.3 |

4.0% | 17.7 | 17.5 |

5.0% | 14.2 | 14 |

6.0% | 11.9 | 11.7 |

7.0% | 10.2 | 10 |

8.0% | 9.0 | 8.8 |

9.0% | 8.0 | 7.8 |

10% | 7.3 | 7 |

**TLDR:** if you want to have a rough estimate of how many years it will take to double your money with a given interest rate, divide 70 by that interest rate.

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