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
Q. What do you understand by Partnership? Partnership - Relationship between two or more persons based on anoral, written or implied agreement whereby they agree to carry on a

Find out the Current dividend per share:   Data Stock price = $ 65 Return = 11% Dividend Yield =  11/ 2 = 5.5 % (given) Formula: Dividend in one year = divid

A gift of residue Where property is not given by a specific legacy nor by a general legacy, it makes up the residue of the testator's estate.  If the testator fails to make a g

Straight-Line Depreciation - ACCOUNTING method which reflects an equal amount of wear and tear during every period of an ASSET'S useful life. For example annual STRAIGHT-LINE DEPRE

Your friend Peter is planning to set up a new business which will manufacture and sell wooden tables. The parts that make up the table consist of a wooden table top measuring 1m by

A____ is a loss to the business and a gain to the debtor

THE TRUSTEE IN BANKRUPTCY 1) Appointment of trustee The trustee is appointed: By the creditors by ordinary resolution, or By the committee of inspection, if so

Q. Show the Expatriation Tax? Expatriation Tax - Individuals who loose or terminate their residency within 10 year period immediately preceding the close of a tax year, if term

IFRS guidelines IFRSs Gives the guideline on the content and the accounting statements of certain events and transactions in the financial statements. The following IFRSs are r

Q. Calculate infant mortality rate? Mid year population 440000 Late fatal death          29 No. of live birth           5200 No. of infant death      423 No. of mate