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
Legal Aspects There is no law relating to branch accounts but examination problems under this heading are frequently linked to either partnership or company account problems. Ans

hi could you please help me in my assignment i need it by 11/1/2017

Maximize Z= 3x1 + 2X2 Subject to the constraints: X1+ X2 = 4 X1 - X2 = 2 X1, X2 = 0

Static Balancing : This balancing is complete in the plane of unbalance. Dynamic Balancing : In this case two balance planes are needed because forces along couples are to

Q. Explain briefly the role of computers in accounting? Computers can be used as accounting machines and perform all the functions which accounting machines perform. Some of th

Q. Required return on equity? Required return on equity Where D 1 = Next year's dividend g = Dividend growth rate P o = Market price of share r = Percentag

what is a maximum leverage ratio covenant designed to control

compute the arithmetic mean rate of return and standard deviation of rates of return for the two series

An intersting point to not is that there is a difference in the tax treatment of income from Limitied Liability Companies (LLCs) and Corporations. What is this difference and what

1a. Explain why it is the case that the value of intermediate goods produced and sold during the year is not included directly as part of GDP, but the value of intermediate goods p