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

Calculate the net income, Jensen Company has the following situation: Sales...

Jensen Company has the following situation: Sales Price: $40 per unit Variable Cost Per Unit: $25 per unit Fixed Costs: $20,000 Units Sold: 4,000 Jensen is considering lowering the

Objectives, what are the types and objectives of international accounting s...

what are the types and objectives of international accounting standersds?

Determine the price of stock and profit, First's current stock price is $26...

First's current stock price is $260. The price may rise to $300 or fall to $170 in one month. The risk-free interest rate is 18% per year. a. Using the replication portfolio app

Determine the price of an asset paying - one period bond , Suppose the inte...

Suppose the interest rate for a one-period bond is 4%. (a) What is the price of an asset paying (1,1,1) which means 1 after 1 period, 1 after 2 periods, and 1 after 3 periods.

What is stock split, Q. What is Stock Split? Stock Split - Increase in ...

Q. What is Stock Split? Stock Split - Increase in number of shares of a company's COMMON STOCK outstanding that result from the issuance of additional shares proportionally to

The balance of arndt''s retained earnings, On December 31, 2010, the stockh...

On December 31, 2010, the stockholders' equity section of Arndt, Inc., was as follows: Common stock, par value $10; authorized 30,000 shares; issued and outstanding 9,000 shares $

605, I am working on the comprehensive probelm and I can not figure out the...

I am working on the comprehensive probelm and I can not figure out the trial balance. Where am I going wrong?

Work sheet, Q : The Trial Balance of Dephane Main Fashion Center contained ...

Q : The Trial Balance of Dephane Main Fashion Center contained the following accounts at November, 30 the end of the company fiscal year. Dephane Main Fashion Center Trial Balanc

Utility of Management accounting, Enumerate the scope and utility of manage...

Enumerate the scope and utility of management accounting.

Preferential debts-distribution of assets-liquidation, Preferential debts ...

Preferential debts These are almost the same as in bankruptcy; with the addition that any person who has advanced money for the payment of wages has the same priority as the pe

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