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 Amortization Software > FREE > Mortgage Calculators

How long does it take to double your money?
FREE Online Calculator
 

How many years does it take before your investment doubles in value?  If we assume the investment is compounding continuously, then we can start with the following formula:

A = Pert

where A is the accumulated value, P is principal, r is the annual interest rate and t is time in years.  A doubling of the principal means that A = 2P and the formula would become:

2P = Pert

  2 = ert  , ln 2 = rt, t = ln 2 / r

If we multiply the top and bottom by 100, the previous equation can be re-written as:

t = 100 ln 2 / 100 r

  = 70 / 100 r

  = 70 / annual interest rate

since 100 ln 2 ~ 70 and r is the annual interest as a decimal, 100r is the annual inflation as a percent. The above formula is often called the Rule of 70.  Let's consider some examples.

Example 1  Assume that the annual rate of inflation is 2.5%.  Estimate the number of years it takes for prices to double.

t = 70 / 2.5 = 28 years

It takes roughly 28 years for prices to double at an annual inflation rate of 2.5%.

Example 2  You invest your savings account at 8% annual interest.  How long does it take before that original investment will double in value using the Rule of 70?

t = 70 / 8.0 = 8.75 ~ 9 years

The online calculator below determines the time (in years) that it takes before your investment will double in value.

Change the annual interest rate to the right and then click Calculate.

 

 

 

 

Rule of 70
Annual Interest Rate  %

Years

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