<P> 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 . Although scientific calculators and spreadsheet programs have functions to find the accurate doubling time, the rules are useful for mental calculations and when only a basic calculator is available . </P> <P> These rules apply to exponential growth and are therefore used for compound interest as opposed to simple interest calculations . They can also be used for decay to obtain a halving time . The choice of number is mostly a matter of preference: 69 is more accurate for continuous compounding, while 72 works well in common interest situations and is more easily divisible . There are a number of variations to the rules that improve accuracy . For periodic compounding, the exact doubling time for an interest rate of r percent per period is </P>

When do you use the rule of 72