Today, I read up some economics, poetry and political science books. After a few paragraphs, I can hardly swallow the contents. Liberal arts subjects are far more tougher than I have ever thought.
I came across this knowledge when I study inflation. In fact, it involves many statistical and probability methods to calculate, evaluate and predict the rate of inflation.( OMG...havent reach that far..XD)
Rule of 72: A rule which is used to divide 72 by the percentage of the current inflation, to find out the duration (year) for a material to take to double it's current price.
eg: Percentage of inflation: 10%
If the price of a box of pencils is RM100 at 1990, the time it uses to reach RM200 is :
72/10=7.2 approx. 7 years
Therefore, at 1997, the price for a box of pencils is RM200.
1 comment:
Ic...
I read about this rule 72 last year, but it is used to count how long will it takes to double up the amount of saving of a person after knowing the interest rate offered. Its the same concept though, HAHA..
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