

10 calculations to know - ideas101
http://www.rediff.com/money/2008/jul/22slde01.htm

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eru
Do not use #10 of the computations. Those are evil approximations exploiting
the fact that hyperbolas can look like the logarithm.

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cperciva
It's an evil approximation, but it's a very good approximation.

For 2% interest, the "rule of 72" tells you that it takes 72/2 = 36 years for
money to double; in fact, it takes 70/2 = 35 years.

For 5% interest, the "rule of 72" says that it takes 72/5 = 14.4 years; in
fact, it takes 71/5 = 14.2 years.

For 8% interest, the "rule of 72" says that it takes 72/8 = 9 years, and is
correct.

For 11% interest, the "rule of 72" says that it takes 72/11 = 6 + 6/11 years;
in fact, it takes 73/11 = 6 + 7/11 years.

For 14% interest, it takes 74/14 years instead of 73/14 years.

Even when you get up to 20% interest, the approximation is close -- it
predicts 3.6 years, where the correct value is 3.8 years.

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eru
I just like the word evil. No moral judgement implied.

