Growth Rate: Difference between revisions
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Dividend in n years = P(1 + r)^n | Dividend in n years = P(1 + r)^n | ||
Thus we can | = 1(1.05)^n | ||
Thus we can obtain following Table: | |||
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Revision as of 02:23, 8 May 2006
The concept of Growth Rate is similar to the concept of Compound Interest:
If Jean-Paul invests a Principal, P, of $1.00 at a growth rate, r, of 5%
Present Dividend = $1.00
Dividend in n years = P(1 + r)^n
= 1(1.05)^n
Thus we can obtain following Table:
Growth Rate Present Dividend Dividend in 5 yrs Dividend in 10 yrs Dividend in 25 yrs
5 % $1.00 $1.28 $1.68 $3.39
10% $1.00 $2.01 $4.05 $32.92
25% $1.00 $3.05 $9.31 $264.70
