Hi All,
Just doing the assessment strategy module 1
I can't not work out how to do this questions:
A property earning –5% income, but +12% capital appreciation
A property earning +2% income and +8% capital appreciation
Is their a simple way of working this out, or am i just going crazy in the head on this
hi ashy ,
the rule of 72 is a investing rule of thumb investing calculation
so 72 divided by the percentage gives you the amount of years it will take for your investment to double
hope that helps with out showing you the answer
daniel
Hi Daniel
Thanks for your reply, already know you divided 72 by the percentage and it gives you the years for it to double,
But how do you work out the -5% in years
-5 % + 12% =? %
72 / ? = 10.28 years
12 - 5 = 7
72 / 7 = 10.286 years approx.
--------------------
2 + 8 = 10
72 / 10 = 7.2 years
So, you are just dividing 72 by the sum of the two returns.
Hope that helps,
Tycho
Dont get too flustered by the calculations Ashy. You could try reworking Steve's examples, so you can work out how he did them, before you attempt to answer any calculation questions.
cheers
Juls