devonwoody
Established Member
useful rule of thumb is the "Rule of 72". This states that if you divide a rate of interest into 72, the resulting number is the number of years for your capital to double if that interest is compounded.
So, for example, if you apply 6% to your capital (reinvesting the interest) then it will take 12 years to double your money. Try applying 6% to £100 for 12 years. Your calculator will show a final answer of £201.22 - so it's a pretty good approximation - huh?!
Alternatively, using the same rule, with inflation of 3% it will take 24 years for your capital to halve in its buying power. The actual answer is a smidgeon (this is a technical term) under 23 years, so the rule works pretty well.
OK - sorry - but I find this stuff interesting anyway. I'm a sad man, I know. I'll get me coat!
Bringing this in line with modern times :
1% would mean 72 years to double your money or 1/4% would mean 288 years which is more the present time. Someone is robbing me????????????
This thread all comes about because I am clearing out my old hard drive awaiting a new PC next week.
So, for example, if you apply 6% to your capital (reinvesting the interest) then it will take 12 years to double your money. Try applying 6% to £100 for 12 years. Your calculator will show a final answer of £201.22 - so it's a pretty good approximation - huh?!
Alternatively, using the same rule, with inflation of 3% it will take 24 years for your capital to halve in its buying power. The actual answer is a smidgeon (this is a technical term) under 23 years, so the rule works pretty well.
OK - sorry - but I find this stuff interesting anyway. I'm a sad man, I know. I'll get me coat!
Bringing this in line with modern times :
1% would mean 72 years to double your money or 1/4% would mean 288 years which is more the present time. Someone is robbing me????????????
This thread all comes about because I am clearing out my old hard drive awaiting a new PC next week.
