Chapter 19: (Almost) Ten Secret Business Formulas Work through the numbers, and you get 200. Therefore, the order quantity that minimises the total cost of your trips to Cape Town and of holding your expensive wine stock is 200 cases. You could, of course, make only one trip to Cape Town per year and buy 2000 cases of wine at once, thereby saving travel money, but you'd spend more money on holding your expensive wine stock than you would save on travel costs. And although you could reduce your wine stock carrying costs by going to Cape Town every week and pick- ing up a few cases, your travel costs would go way, way up. (Of course, you would get about a billion frequent-flyer miles yearly.) You can use the Standard view of the Windows Calculator to compute eco- nomic order quantities. The trick is to click the (square root) key last. For example, to calculate the economic order quantity in the preceding example, you enter the following numbers and operators: (2 × 2000 × 1000) / 100 = 355 The Rule of 72 The Rule of 72 isn't exactly a secret formula. It's more like a general rule. Usually, people use this rule to figure out how long it will take for some investment or savings account to double in value. The Rule of 72 is a cool little trick, however, and it has several useful applications for business people. What the rule says is that if you divide the value 72 by an interest rate per- centage, your result is approximately the number of years it will take to double your money. For example, if you can stick money into some invest- ment that pays 12 percent interest, it will take roughly six years to double your money because 72 / 12 = 6. The Rule of 72 isn't exact, but it's usually close enough. For example, if you invest £1,000 for six years at 12 percent interest, what you really get after six years isn't £2,000 but £1,973.92. If you're in business, you can use the Rule of 72 for a couple of other fore- casts, too: