Hi there,

For many of the questions with compound rates you can apply the** rule of 72.**

According to it, the time to double, t, is equal to 72/r, where r is the compound growth rate:

t=72/r

So Innovation Capital will double in:

72/5 ≈14

So in 14 years will be around 28M. Growing at 5%, in 10 years will around 20% less (using now simple growth rate for simplicity), or approximately 22M

You now have to see the level of Human Capital to become 11M. This means that in 10 years it has to do a bit less than 4x.

Applying again rule of 72 (twice in this case), you find that to do 4x:

- With 10% you need around 14 years
- With 15% you need around 10 years
- With 20% you need around 7 years
- With 25% you need around 6 years

So the minimum is 15%.

Hope this helps,

Francesco

Hi there,

For many of the questions with compound rates you can apply the** rule of 72.**

According to it, the time to double, t, is equal to 72/r, where r is the compound growth rate:

t=72/r

So Innovation Capital will double in:

72/5 ≈14

So in 14 years will be around 28M. Growing at 5%, in 10 years will around 20% less (using now simple growth rate for simplicity), or approximately 22M

You now have to see the level of Human Capital to become 11M. This means that in 10 years it has to do a bit less than 4x.

Applying again rule of 72 (twice in this case), you find that to do 4x:

- With 10% you need around 14 years
- With 15% you need around 10 years
- With 20% you need around 7 years
- With 25% you need around 6 years

So the minimum is 15%.

Hope this helps,

Francesco