A towel will last for around 80-100 washes. Over time, you'll notice your towels become thinner, scratchier and less absorbent due to the fibres they lose over time. You'll probably need to wash your towels every 4-5 days, in which case, you can expect them to last for around 2 years. If you have a few sets of towels, they'll last longer as you'll be washing them less often.
What to do with those old towels that have seen better days? Don't put them in the bin; cut them up and use as cleaning cloths or keep in the shed or car boot for muddy hands, boots and paws. If you've no use for them then consider donating to an animal shelter or fabric re-use charity where they'll be given a new lease of life.