What is the Rule of 69 in the context of the doubling period? Mention any two benefits and two limitations of this rule.

According to the Rule of 69, the doubling period is equal to: 0.35 + (69/Interest Rate) Example: If interest rate is 10%, the doubling period will be: 0.35 + (69/10) = 7.25 years The following are the benefits of the rule of 69. It assumes that the interest is continuously compounding. In fact, it is true to think in the case of equity valuation that is compounding on an instant basis. It provides an answer very close to the answer obtained by using a financial calculator. It is even considered the thumb rule of the investment return generating a cycle. Easy to calculate the time required. Even the retail investor or a non-finance person can easily determine the result. Can be used by any person without understanding the pure logic. Faster decision making and improve thought process. The following are the limitations of the rule of 69. Difficult to explain the logic behind the number 69. Rule 69 does not apply to everything. Only the security like equity, which is compounding every minute, can provide the exact value. If the rate is too less like 2/3% Per annum, than the result is not very accurate. Generally, the higher rate is well captured by this formula. Projects with a heavy investment need specially designed spreadsheets because a minuscule difference in time and rate of interest value can create a difference of millions. Difficult to absorb the value derived because of non-transparency of value derivation. This rule covers those instruments which compounds continuously like equity shares, but it ignores the dividend component which is also received by the equity holder, so overall the share did not increase by an exact multiple of 2, but the dividend amount makes the value of it.