Table of contents

1. Introduction to Accounting1h 21m
2. Transaction Analysis1h 13m
3. Accrual Accounting Concepts2h 38m
4. Merchandising Operations2h 30m
5. Inventory1h 55m
6. Internal Controls and Reporting Cash1h 16m
7. Receivables and Investments3h 8m
8. Long Lived Assets5h 1m
9. Current Liabilities2h 19m
10. Time Value of Money1h 23m
- Time Value of Money Equations
  35m
- Using Time Value of Money Tables
  47m
11. Long Term Liabilities2h 45m
12. Stockholders' Equity2h 15m
13. Statement of Cash Flows2h 24m
14. Financial Statement Analysis5h 25m
15. GAAP vs IFRS56m

10. Time Value of Money

Time Value of Money Equations

Financial Accounting

10. Time Value of Money

Time Value of Money Equations

Previous problemNext problem

Struggling with Financial Accounting?

Join thousands of students who trust us to help them ace their exams!Watch the first video

Multiple Choice

According to the Rule of 72, how can you estimate the number of years required to double an investment at a given annual interest rate?

Add 72 to the annual interest rate.

Divide 72 by the annual interest rate.

Divide the annual interest rate by 72.

Multiply 72 by the annual interest rate.

Previous problemNext problem

Verified step by step guidance

Understand the Rule of 72: It is a simple formula used to estimate the number of years required to double an investment at a given annual interest rate. The formula is: \( \text{Years to double} = \frac{72}{\text{Annual Interest Rate}} \).

Identify the annual interest rate (expressed as a percentage) provided in the problem. For example, if the annual interest rate is 6%, use this value in the formula.

Substitute the annual interest rate into the formula. For instance, if the interest rate is 6%, the formula becomes \( \text{Years to double} = \frac{72}{6} \).

Perform the division operation to calculate the approximate number of years required to double the investment. Note that this step is for understanding the process, and the actual calculation is not performed here.

Interpret the result: The output of the formula gives you an estimate of how many years it will take for the investment to double at the specified annual interest rate.