To find how many years an amount will take to double at a given growth rate, simply divide 72 by said growth rate.
So at 7%, $100 should double in 10 years.
72 / 7 ~= 10
When I look at a company with Value Line or roic.ai, I want the revenues to have at least doubled over the last 7 years. That tells me it’s been growing at at least 10%.
72 / 10 ~= 7
Remember this is a rule of thumb, and it becomes less and less accurate the further you deviate from a 7% interest rate.
Written in 2015. Edited in 2023.