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

Written inquiries for financial information, Q. Written inquiries for finan...

Q. Written inquiries for financial information? Inquiry - A procedure which comprises seeking information both financial and non-financial, of knowledgeable persons throughout

Problems due to piecemeal realizations-partnership, Problems due to Pieceme...

Problems due to Piecemeal realizations These interim distributions give rise to two problems: Partners have not always contributed capitals in the same ratio as that in w

ACCOUNTING THEORY AND PRACTICE, EXPLIN THE PROCEDURE FOLLOWED IN GOVERMENT ...

EXPLIN THE PROCEDURE FOLLOWED IN GOVERMENT SYSTEM OF ACCOUNTING IN INDIA.

Application of discharge-discharge of bankrupt, Application of discharge ...

Application of discharge Application may be made at any time after adjudication, but cannot be heard until the conclusion of the public examination. Notice of the hearing must

What are the january cash collections from sales, O'Neill Co. has $298,106 ...

O'Neill Co. has $298,106 in accounts receivable on January 1. Budgeted sales for January are $840,001. O'Neill expects to sell 20% of its merchandise for cash. Of the remaining 80%

U.s savings bonds, Natalie cashes in her U.S savings Bonds and receives % 5...

Natalie cashes in her U.S savings Bonds and receives % 520, which she deposits in her personal bank account. Journalize it

Sensitivity analysis of project, Q. Sensitivity Analysis of Project? Th...

Q. Sensitivity Analysis of Project? This system measures the change in project NPV arising from a fixed change in each project variable or measures the change in every project

Prepare journal entries - bussiness accounting, Question 1  Describe a...

Question 1  Describe and differentiate the four (4) different Financial Statements. HINT : use examples of actual companies or transactions to illustrate your answer. Give

Sunk cost and opportunity cost., In the NPV analysis, sunk cost is not rele...

In the NPV analysis, sunk cost is not relevant whereas opportunity cost is for project evaluation. Requirements: Describe and justify the above statement about sunk cost an

Calculate marginal tax rate, Rogers Communication is considering whether to...

Rogers Communication is considering whether to take advantage of historically low Canadian interest rates and lower its cost of debt by refunding its old bonds. Rogers has a $50mil

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