started. With 1 split we have 21 or 2 times as much. With 4 splits we have 24 = 16 times as much. As a general formula:
Said another way, doubling is 100% growth. We can rewrite our formula like this:
It’s the same equation, but we separate 2 into what it really is: the original value (1) plus 100%. Clever, eh?
Of course, we can substitute any number (50%, 25%, 200%) for 100% and get the growth formula for that new rate. So the general formula for x periods of return is:
This just means we use our rate of return, (1 + return), “x” times.
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