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Time at which price doubles in inflation.

  1. May 3, 2012 #1

    PhysicoRaj

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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.
     
  2. jcsd
  3. May 3, 2012 #2
    If X is the rate of inflation - 100/x
     
  4. May 3, 2012 #3

    PhysicoRaj

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    Thanks.
     
  5. May 3, 2012 #4

    phyzguy

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    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.
     
  6. May 3, 2012 #5

    PhysicoRaj

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    At last!!!!!!
    I was waiting for someone who told me this rule! I wanted to know if this was familiar to all. Cheeeerup!!
     
  7. May 3, 2012 #6
    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.
     
  8. May 3, 2012 #7

    phinds

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    Indirection is sleazy. If you want to know something on this forum, just ask.
     
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