CDS Community Development Strategies
Explanation of the Rule of 70
The rule of 70 is a way to estimate the time it takes to double a number based on its growth rate. The formula is as follows: Take the number 70 and divide it by the growth rate. The result is the number of years required to double. For example, if your population is growing at 2%, divide 70 by 2. The result is 35; it will take 35 years for your population to double at a 2% growth rate.
The United States has one of the highest growth rates of any industrialized nation, even though it’s only around 0.7%. The map below depicts the various percentage growth rates around the world.
While in New Hampshire pursuing his presidential aspirations, Jeb Bush stated his economic goal for America: "4 percent growth as far as the eye can see.” Using the rule of 70 you can see why his 4 percent growth pledge was viewed by many economists as ambitious at best and unrealistic for any lengthy period of time. This would mean the economic output of the nation would essentially double in roughly 18 years.
Remember the Rule of 70
Well, next time you find yourself in a conversation or presentation and growth rates come up, remember the Rule of 70, Its a quick and easy way to make sense of numbers that can sometimes be challenging to visualize.