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The Basics - Doubling Time

has the formula that we will fit everything into; the one that banks use to calculate "daily interest" in accounts:  A = P(1 + r/n)nt where the symbols mean

(This top box will more often be set to "Yield".)

That changes to extracting %yr Rate of growth of charts, dividends or earnings.

total amount
A ( Examples of A:

Right hand price on a chart.

Dividend now.

Earnings, Book Value or Number of shares out now.

first box
; answer at bottom) is given by

your original P=$10k ( Examples: Left hand price on a chart t years wide.

Dividend, Earnings, Book Value or Number of shares out t years ago.

second box
) invested at

interest rate of r=7%/yr( Usually this will be chart slope and appear at the top.

The calculator can also get growth rate of interest.

Total return is growth plus yield.

third box)


compounded n times per year ( "Continuous" means time between calculations goes to zero.

Effectively, that eliminates the variable n completely.

fourth box
)

and sitting there for t years ( In this case enter Yield you are testing.

For other examples, set the top box to "Yield", moving the other entries upward.
fifth box
):

Notice that setting n=a zillion (continuous) eliminates it and changes the formula to A = Pert. This formula is used by banks to calculate interest.

To do that it has to be changed to r=Ln(A/P)/t.

Notice that it is not yield.

That happens to be
the formula for the ert swoops upward on a normal plot.

A "log plot" makes it into a straight line by compressing the upper part of the Y-axis.
"log plots" that
market websites show us.


EXERCISE: Experiment with the interest rate  and number of years to retirement . What appears above is the result This is 73%/r in %/yr.

Thus inflation would halve your holding at minus 2%/yr.

doubling-time
for ten k invested in an ETF called HAC.TO and just left sitting there. Try various other times - to - retirement, using your entire RRSP-room for P. Result A = ][]54[.

Try an "interest rate" of 10%/yr which we have recently been getting by holding banks. There are several ETF choices below which return about that much.

Try an aggressive rate of 20%/yr which we have been getting from an ETF holding Amazon, Google etc. in the list of ETFs. Here is the pattern you will find:

Divide the %/yr growth rate into 70 to estimate doubling time.

Caveat: the above numbers do not take into account the effect of inflation.