Answered>Order 2086

Some of you may be familiar with the “Rule of 72”. This rule is a mathematical construct which has applications in financial planning, population growth, etc..

As a practical exercise, consider whether you can accumulate $1 million (be a millionaire) by merely saving $200 a month.

Furthermore, when you consider this rule within the context of forecasting, describe the importance of choosing your growth rates for projecting your business plans. For example, assume a 3% growth rate verses a 7% growth rate, both on a consistent basis with compounding. Where is your business growth in 20 years under the 2 growth rate assumptions assuming your present day revenue is $1 million?