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 * 1.05x = $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 1.05x = 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 rateActual time to double (years)Rule of 70
1.0%69.770
2.0%3535
3.0%23.423.3
4.0%17.717.5
5.0%14.214
6.0%11.911.7
7.0%10.210
8.0%9.08.8
9.0%8.07.8
10%7.37

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.