General Principles

Question 1

Liquidity Ratio

Answer 1

Asset/Liability = Current Ratio

Question 2

Real Rate of Return

Answer 2

[ 1 + After Rate of Return / 1 + Inflation Rate - 1] x 100 = Real Rate of Return

Question 3

Financial Calculator

Answer 3

Begin / End Mode

Question 4

Rule of 72

Answer 4

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

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where:
Interest Rate=Rate of return on an investment
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