# Calculation of the Compound Growth Rate

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### Doubling Period in Compound Growth Rate

##### The doubling period is the time required, to double the amount invested at a given rate of interest. For example, if you deposit Rs. 10,000 at 6 per cent interest, and it takes 12 years to double the amount. (See compound growth rate value for one rupee Table at 6 per cent till you find the closest value to 2). The doubling period can be computed by adopting two rules, namely: 1. Rule of 72: To get doubling period 72 is divided by interest rate. Doubling period (Dp) = 72 ¸ I Where, I = Interest rate. Dp = Doubling period in years. Illustration : If you deposit Rs. 500 today at 10 per cent rate of interest, in how many years will this amount double? Solution: Dp = 72 ¸ I = 72 ¸ 10 = 7.2 years (approx.) 2. Rule of 69: Rule of 72 may not give the exact doubling period, but the rule of 69 gives a more accurate doubling period. The the formula to calculate the doubling period is: Dp = 0.35 + 69 / I Illustration : Take the above problem as it is and calculate doubling period. Solution: Dp = 0.35 + 69 / 10 = 7.25 years. 