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Time at which price doubles in inflation.

by PhysicoRaj
Tags: doubles, inflation, price, time
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PhysicoRaj
#1
May3-12, 02:21 AM
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anybody knows how to calculate the period which a commodity which faces inflation takes to double it's price, without knowing anything except the rate of inflation? You must give a very shortcut method.
Thanks.
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Bignose
#2
May3-12, 03:09 AM
P: 15
If X is the rate of inflation - 100/x
PhysicoRaj
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May3-12, 06:01 AM
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Thanks.

phyzguy
#4
May3-12, 06:14 AM
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Time at which price doubles in inflation.

Quote Quote by Bignose View Post
If X is the rate of inflation - 100/x
Actually, a much better approximation is the "rule of 72", which is that the number of years to double at an annual growth rate of x% is 72/x. This is because (1+p)^n ~ e^(np), and ln(2) = .69. A slight correction makes it 72 instead of 69. Try it. You'll find that (1+p)^(72/p) ~=2.0 for a wide range of p.
PhysicoRaj
#5
May3-12, 06:36 AM
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Quote Quote by phyzguy View Post
Actually, a much better approximation is the "rule of 72", which is that the number of years to double at an annual growth rate of x% is 72/x. This is because (1+p)^n ~ e^(np), and ln(2) = .69. A slight correction makes it 72 instead of 69. Try it. You'll find that (1+p)^(72/p) ~=2.0 for a wide range of p.
At last!!!!!!
I was waiting for someone who told me this rule! I wanted to know if this was familiar to all. Cheeeerup!!
Bignose
#6
May3-12, 04:22 PM
P: 15
Is inflation compounded though? my dollar stays a dollar year to year if I hold on to it. If I take 2% off and its... I guess it makes sense to compound an inflation rate. Stupid trick question.
phinds
#7
May3-12, 04:32 PM
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Quote Quote by PhysicoRaj View Post
At last!!!!!!
I was waiting for someone who told me this rule! I wanted to know if this was familiar to all. Cheeeerup!!
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