Hello All,
I am stuck at understanding shortcuts for estimating large CAGRs:
- eg: a CAGR of 20% for 6 years for let's say $10 M
- eg: a CAGR of 40% for 3 years
- Calculating CAGR, let's say 2006- $6M and 2016 $60M-- how to calculate this mentally?
Thank you very much for your help and suggestions.
Hi,
You can use the rule of 72:
72 / 20 = 3.6 - 3.6 years takes it to double
6 / 3.6 = 1.5 - 1.5 times it will double
10M * 2ˆ1.5 = 30M
If you google the rule of 72 you'll find tons of examples
Best
