Doubling period, Financial Accounting

One of the initial and the most general questions regarding an investment optional is the time period needed to double the investment. One clear way is to consider to the table of compound factor from that this period can be computed.  For illustration the doubling period at 3 percent, 4 percent, 5 percent, 6 percent, 7 percent, 8 percent, 9 percent, 10 percent, 12 percent would be approximately 23 years, 18 years, 14 years, 12 years, 10 years, 9 years, 8 years, 7 years, and 6 years correspondingly.

If one is not inclined to utilize future value interest factor tables there is an option, termed as rule of 72. As per to this rule of thumb the doubling period is acquired by dividing 72 through the interest rate.  For illustration, at the interest rate of 8 percent the approximate time for doubling an amount would be as 72/8 = 9 years.

A vary accurate rule of thumb is rule of 69. According to this rule the doubling period is equivalent to:

.35 + (69/ Interest rate)

By using this rule the doubling period used for an amount fetching 10 % and 15% interest would be as given:

35 +  69/10 = .35 + 6.9 = 7.25 years

35 +  69/15 =.35 + 4.6 = 4.95 years

Posted Date: 4/9/2013 2:30:16 AM | Location : United States







Related Discussions:- Doubling period, Assignment Help, Ask Question on Doubling period, Get Answer, Expert's Help, Doubling period Discussions

Write discussion on Doubling period
Your posts are moderated
Related Questions
Suppose that the annual rate of interest is 4%. (a) What is the monthly rate? (b) Consider a 3-year lease on a car that is worth $20,000 today. The first payment on the lease

Fair value adjustment IFRS 3 requires that goodwill on consolidation should be based on the fair values of the net assets of the subsidiary company on the date of acquisition. T

XYZ Enterprises manufactures tires for the Formula One motor racing circuit. For August 2011, XYZ budgeted to manufacture and sell 3,000 tires at a variable cost of $74 per tire an


Public Oversight Board (POB) - POB is an independent oversight board, composed of public members that monitors and evaluates peer reviews conducted by SEC Practice Section (SECPS)

Statement of Cash Flows - A statement of cash flows is one of the fundamental financial statements which is required as part of a complete set of financial statements prepared in c

Balance Sheet Classifications and Relationships: Shelley and Co. has the following balance sheet elements as of December 31, 2012. Land. . . . . . . . . . . . . . . . . . . . . . .


Below is information about the spot and forward rates for three currencies against the US dollar (USD): Currency (exchange rate) Spot Rate Six-month forward rate Euro (EUR)

Review - Accounting service which provides some assurance as to reliability of financial information. In a review, a CERTIFIED PUBLIC ACCOUNTANT (CPA) doesn't conduct an examinatio