In this video we discuss what is and how to calculate the rule of 70 for inflation. This tells us, based on the rate of inflation, how long it will take prices to double
Transcript/notes
The rule of 70 is basic rough estimate of look at how long it will take the value of the dollar to go down by one half or prices to double.
The formula for this is years to double equals 70 divided by the percent rate of inflation, not the decimal value, the actual percent.
As an example, if the rate of inflation is 2.9%, how many years will it take for prices to double?
Using the formula, we have 70, divided by 2.9, which calculates to 24 years rounded off.
And here are a couple more examples, written out on the screen for you.