General Principles Flashcards
1
Q
Liquidity Ratio
A
Asset/Liability = Current Ratio
2
Q
Real Rate of Return
A
[ 1 + After Rate of Return / 1 + Inflation Rate - 1] x 100 = Real Rate of Return
3
Q
Financial Calculator
A
Begin / End Mode
4
Q
Rule of 72
A
The Rule of 72 is a calculation that estimates the number of years it takes to double your money at a specified rate of return. If, for example, your account earns 4 percent, divide 72 by 4 to get the number of years it will take for your money to double. In this case, 18 years.
Years to Double= 72/interest rate
where:
Interest Rate=Rate of return on an investment
