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By: Gavin Chait on 05 July 2007
Your calculation assumes they were already earning the 6%, which they weren't. Clearly if all they got was a 1.5% increase it would take longer.
My calculation is slightly more elegant since, by factoring in inflation (at the long-term average of 5.5%) I get a rate at which inflation will eat up their gains. Of course, if they borrowed money to cover their losses, then all bets are off and they may never recover that increase.
No matter what, though, that increase was 7.5% not 1.5%.
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