Today I was doing my Economics homework when I came across a section about the “Rule of 70.” The rule states that for a value that has a growth rate of n%, the number of years for the value to double is approximately 70 divided by n.
This was curious to me. Usually, rules like these based on “coincidence” should have some form of mathematical basis! So why 70, of all numbers?
First, I assumed that the rate of growth was x% per year. The final value V of a beginning value P after t years is . Solving for t when V=2P (double the initial):
Using logarithmic base conversion,
The above plot was made with Wolfram Alpha.
Now, let’s say we want to shortcut this expression using a function with similar qualitative properties. What function is easy to use and looks similar to this? That’s right, rational functions of degree -1. In this case, we can use the generic function , where q is a number we shall shortly solve for, since it is also asymptotic to both the x and y axes.
The thing is, how do we determine what q is? We can’t just solve it out, since that won’t work out nicely. We can’t take the limit of q to infinity with respect to x, since the error deviates a lot. (Even look at the example of 100% interest – with one method, we get 1 year, and with the other, we get 0.7 year.) But we know that the rule holds pretty well for small numbers, like x=2. So why not take the limit of q to zero with respect to x?
Thus, using some L’Hopital’s rule and other clever devices,
And this, of course, is equal to 100ln2, which is about 69.315, which is about 70!!!!!! So it all makes sense now.
A comparison of the “rigorous” function and the “estimate” function:
And finally, a percent-error graph for values 0 to 100:
But yeah, totally awesome! xD






