Doubling Time Calculator (Click Here or Scroll Down)
The Doubling Time formula is used in Finance to calculate the length of time required to double an investment or money in an interest bearing account.
It is important to note that r in the doubling time formula is the rate per period. If one wishes to calculate the amount of time to double their money in a money market account that is compounded monthly, then r needs to express the monthly rate and not the annual rate. The monthly rate can be found by dividing the annual rate by 12. With this situation, the doubling time formula will give the number of months that it takes to double money and not years.
In addition to expressing r as the monthly rate if the account is compounded monthly, one could also use the effective annual rate, or annual percentage yield, as r in the doubling time formula.
Example of Doubling Time Formula
Jacques would like to determine how long it would take to double the money in his money market account. He is earning 6% per year, which is compounded monthly. Looking at the doubling time formula, we need to consider that the 6% would need to be divided by 12 in order to come to a monthly rate since the account is compounded monthly. Given this, r in the doubling time formula would be .005 (.06/12). After putting this into the doubling time formula, we have:
After solving, the doubling time formula shows that Jacques would double his money within 138.98 months, or 11.58 years.
As stated earlier, another approach to the doubling time formula that could be used with this example would be to calculate the annual percentage yield, or effective annual rate, and use it as r. The annual percentage yield on 6% compounded monthly would be 6.168%. Using 6.168% in the doubling time formula would return the same result of 11.58 years.
Alternative to Doubling Time
For quick estimations of how long it takes to double the money on an investment, some may choose to use the rule of 72. The rule of 72 is found by dividing 72 by the rate of interest expressed as a whole number. For example, a rate of 6% would be estimated by dividing 72 by 6 which would result in 12 years. As stated, this is only an estimation as a 6% rate would take 11.90 years using the actual doubling time formula.
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FAQs
There is an important relationship between the percent growth rate and its doubling time known as “the rule of 70”: to estimate the doubling time for a steadily growing quantity, simply divide the number 70 by the percentage growth rate.
How do you find doubling time on a rule of 70 calculator? ›
The Rule of 70 Formula
Hence, the doubling time is simply 70 divided by the constant annual growth rate. For instance, consider a quantity that grows consistently at 5% annually. According to the Rule of 70, it will take 14 years (70/5) for the quantity to double.
How to calculate doubles? ›
We can double any number in two ways. 1) Multiply the number by 2. 2) Add the number to itself. Example: Michelle has 4 balls, and Jane has double the number of balls that Michelle has.
What is the formula for cell doubling time? ›
This time can be calculated by dividing the natural logarithm of 2 by the exponent of growth, or approximated by dividing 70 by the percentage growth rate (more roughly but roundly, dividing 72; see the rule of 72 for details and derivatiatives of this formula).
What is the doubling time trick? ›
In finance, the rule of 72, the rule of 70 and the rule of 69.3 are methods for estimating an investment's doubling time. The rule number (e.g., 72) is divided by the interest percentage per period (usually years) to obtain the approximate number of periods required for doubling.
How do you calculate doubling sequence? ›
The doubling sequence is geometric. Geometric sequences have the form 1, r, r2, r3, r4,... Terms in the doubling sequence lie on the exponential curve y = 2x. Summing values in a row of Pascal's triangle generates the dou- bling sequence.
What is double time calculator? ›
Here's how to calculate the double time pay Lila is owed: Double time pay = (Regular pay rate x 2) x Any time that exceeds regular hours. ($20 x 2) x 8, or, $40 x 8. Double time pay = $320.
How do you solve double time? ›
Calculating Double Time
To calculate an employee's double time pay, you need to determine their regular hourly rate and multiply it by two. Then, you need to multiply that amount by the number of double time hours worked.
What is the formula for doubling money? ›
Do you know the Rule of 72? It's an easy way to calculate just how long it's going to take for your money to double. Just take the number 72 and divide it by the interest rate you hope to earn. That number gives you the approximate number of years it will take for your investment to double.
What is the doubling method? ›
Remember, to double a number just add it to itself. So if 4 x 1 =4, then I double the second factor to make 4 x 2, I double the first answer (4 + 4), and I get 8 as my new product. Now that I know 4 x 2, I can use doubling to help me figure out a new set of facts.
Basically, you can find the doubling time (in years) by dividing 70 by the annual growth rate. Imagine that we have a population growing at a rate of 4% per year, which is a pretty high rate of growth. By the Rule of 70, we know that the doubling time (dt) is equal to 70 divided by the growth rate (r).
How do you calculate daily doubling? ›
At the doubling rate, the amount for any given day is 2^(n-1) where n is the day number, so on last day you have 2^29, giving 5,368,705.28 dollar just on 30th day.
How do you calculate doubling time from OD? ›
Bacteria doubling time is usually calculated by first measuring OD600nm absorbance and then plot the log2(OD600nm) readings against the time. The doubling time represents the time bateria takes to double their amount in cell number when they are within exponential growth phase.
What is the formula for doubling time interest? ›
Do you know the Rule of 72? It's an easy way to calculate just how long it's going to take for your money to double. Just take the number 72 and divide it by the interest rate you hope to earn. That number gives you the approximate number of years it will take for your investment to double.
What is the doubling time formula 72? ›
The Rule of 72 is a calculation that estimates the number of years it takes to double your money at a specified rate of return. If, for example, your account earns 4 percent, divide 72 by 4 to get the number of years it will take for your money to double. In this case, 18 years.
What is the formula for doubling every 20 minutes? ›
The population of a colony of bacteria can double every 20 minutes, as long as there is enough space and food. The more bacteria you already have, the more new bacteria you get. This is modeled by the function P(t)=P02t/20, where P0 is the number of bacteria you start with and t is the time, measured in minutes.
