CPM Homework Banner

Home > PC > Chapter 8 > Lesson 8.2.3 > Problem 8-111



The Rule of 70 is a useful rule of thumb for determining the doubling time under steady (exponential) growth. To get the doubling time, the rule tells us to divide 70 by the growth rate, expressed as a percentage. Carry out the following steps to see why the Rule of 70 works as it does.

  1. Use with to find the exact doubling time in terms of the growth rate without using your calculator. In other words express in terms of .

  2. If is the rate of growth (i.e. ), and is the percentage rate of growth (i.e. ), express in terms of .

  3. Using your calculator to evaluate , show that doubling time with growth rate is .

  4. is closer to than . Why do we use ?

    We use because it makes the mental arithmetic easier.