3 ms·
Fun exercise: If something grows at 3.5% per year, how long does it take to double in size? Answer: About 20 years. The exact answer is ((log 2)/(log 1.035)).
by troymc 15y ago
Fun exercise: If something grows at 3.5% per year, how long does it take to double in size?
Answer: About 20 years. The exact answer is ((log 2)/(log 1.035)).
- kqr2 15y agoA handy rule of thumb for doubling is 70/(rate of growth).
- troymc 15y agoYes... Unfortunately, some people think that's the correct way to calculate doubling time for all rates of growth. Some pop investing books even elevate that rule to some kind of magical status. One way to see why it's a good approximation is to do a Maclaurin series: (log 2)/(log(1+r/100)) = c/(log(1+x)) where c=(log 2) and x=(r/100) = c/(x - [x^2]/2 + [x^3]/3 - ...) ~ c/x = 0.693/x = 0.693/(r/100) = 69.3/r ~ 70/r