Doubling period, Financial Accounting

Assignment Help:

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


Related Discussions:- Doubling period

Prepare the journal entries, Clarkston Inc issued $1,000,000 of convertible...

Clarkston Inc issued $1,000,000 of convertible 10- year, 11% bonds on July 1, 2014. The interest is payable semiannually on January 1 and July 1. The discount in connection with th

Concepts, what is the implication of applying accounting concepts wrongly

what is the implication of applying accounting concepts wrongly

Forecast income statements, The forecast income statements are as follows: ...

The forecast income statements are as follows: WORKINGS Sales = 50000 × 1·12 = $56000000 Variable cost of sales = 30000 × 1·12 × 0·85 = $28560000 Fixed cost of sa

Goodwynn & wolf incorporated, Nine years ago, Goodwynn& Wolf Incorporated s...

Nine years ago, Goodwynn& Wolf Incorporated sold a 16-year bond issue with a 11% yearly coupon rate and a 10% call premium. Today, G&W known as the bonds. The bonds originally were

Produce an adjusted purchases ledger account, Question: Andrew Hegel ma...

Question: Andrew Hegel manufactures garments in his Malagasy Factory. In an effort to remain competitive he continually switches between suppliers.. This has resulted in extra

Impairment of Long-lived assets, How to calculate fair value of long-lived ...

How to calculate fair value of long-lived asset when the information about fair value is not available?

Discuss the pros and cons of financing in unhedged, You have the following ...

You have the following information about rates in London for Eurocurrency loans of one-year duration, the exchange rate between the USD and euros, the currency in which you want fi

Record the appropriate journal entry., Grand Champion, Inc., purchased Amer...

Grand Champion, Inc., purchased America's Sweethearts Corporation on January 1, 2013. At the time, America's Sweethearts had $750,000 of identifiable assets and $525,000 of liabili

Net cash provided by operating activities was?, 50. In preparing a company'...

50. In preparing a company's statement of cash flows for the most recent year on the indirect method, the following information is available: 52,000-Net income for the year 18,00

List the various methods of determining goodwill, Question 1 Explain the f...

Question 1 Explain the five accounting concepts with an example Separate entity concept Going concern concept Money measurement concept Cost concept Dual aspect

Write Your Message!

Captcha
Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd