Compound interest

[Pat494]

A simple question for maths geeks
I hope to make 2% a week on my wedge but usually average about 1 %.
If I start with say £100 then 1% is £1 and 2% is £2 right.
But what could I expect to profit over 1 year at 1 or 2 % with compound interest ?

 

[tomorton]

Compound Interest Calculator

This free calculator also has links explaining the compound interest formula.

www.moneychimp.com

+1% per week on £100 gives you £167.77p
+2%/wk gives £280.03p

 

[Pat494]

Compound Interest Calculator

This free calculator also has links explaining the compound interest formula.

www.moneychimp.com

+1% per week on £100 gives you £167.77p
+2%/wk gives £280.03p

Thanks Tom

 

[MasterOfCoin]

Oh yes, yes, yes.

Good link there, @tomorton

Compound Interest is Nature's secret doomsday weapon.

[ It is also completely and totally incomprehensible to politicians, bureaucrats and all policy makers, which bodes ill for the future of humanity ]

But for those willing to grasp it's power, it's a route to prosperity


For any still reading who may struggle with complex multiplication -

A 'magic' number to keep in mind is ~7%.

At this abracadabra rate, you basically double your initial start amount every tenth time it's applied.

So £1,000= at 7% APR becomes £2,000 after 10 years, £4,000 after 20 and so on...


Why doomsday? well, if you started with a grain of sand and doubled it according to this rate per minute, then...

You get 2 grains @ 10 minutes, 4 grains at 20 mins, 8 grains after 30 etc...

which is easy enough to do for the first hour or two

However, you will not have time to get bored of the task, as long before the day is out, you will run out of sand -

There is not enough sand in the entire Sahara to complete a single day of this, more pointedly, there isn't enough sand on the planet to do this. Heck, you could use all the sand on Mars too, and still not have anywhere near enough, lol.

Compound Interest is Lethal.

If you don't believe, just try it.

(or ask anyone with a runaway credit card debt)

 

[postman]

A simple question for maths geeks
I hope to make 2% a week on my wedge but usually average about 1 %.
If I start with say £100 then 1% is £1 and 2% is £2 right.
But what could I expect to profit over 1 year at 1 or 2 % with compound interest ?

Previous posters have hinted at the power of compound interest, but I dont think they have done it justice. It has been attributed to Albert Einstein the quote "Compound interest is the eighth wonder of the world. He who understands it, earns it … he who doesn't … pays it!"(although he has been attributed many saying that were not his).

Whilst the one year figures are correct compound interest is like fine wine or a good single malt and the awesome beauty of it can only be appreciated with a little more maturity, lets say the term of a mortgage ...

Start with £100

Gaining 1% interest per week

Gaining 2% interest per week

1 year £167.77	£280.23
2 years £281.46	£784.18
3 years £472.21	£2,195.97
4 years £792.22	£6,149.44
5 years £1,329.10	£17,220.46
6 years £2,229.81	£48,222.93
7 years £3,740.93	£135,040.03
8 years £6,276.12	£378,156.40
9 years £10,529.38	£1,058,962.02
10 years £17,665.03	£2,965,441.19

11 years £29,636.42	£8,304,208.56
12 years £49,720.70	£23,254,509.28
13 years £83,415.87	£65,120,257.78

14 years £139,945.88	£182,358,093.31
15 years £234,785.65	£510,662,508.54
20 years £3,120,532.67	£637,082,695,047.13
25 years £41,474,954.42	£15,143,396,390,153.00

Now all you need is a way of making between 1% and 2 % profit consistently.

 

[0007]

7 years £3,740.93	£135,040.03
8 years £6,276.12	£378,156.40
9 years £10,529.38	£1,058,962.02
10 years £17,665.03	£2,965,441.19

11 years £29,636.42	£8,304,208.56
12 years £49,720.70	£23,254,509.28
13 years £83,415.87	£65,120,257.78

14 years £139,945.88	£182,358,093.31
15 years £234,785.65	£510,662,508.54
20 years £3,120,532.67	£637,082,695,047.13
25 years £41,474,954.42	£15,143,396,390,153.00

Now all you need is a way of making between 1% and 2 % profit consistently.

And the balls to keep it all in play all of the time. (Look mum - see my drawdown!)

 

[CavaliereVerde]

Do you know someone able to return 1% per week?
Trackrecords with +67% in one year can be found, but never for 2-3 consecutive years.

Trading with realistic expectations

A blog about Options trading and Forex trading

www.the-lazy-trader.com

 

[ffsear]

Do you know someone able to return 1% per week?

Trading with realistic expectations

A blog about Options trading and Forex trading

www.the-lazy-trader.com

With leverage, yes!

 

[CavaliereVerde]

Can you show me the trackrecord?

 

[ffsear]

Can you show me the trackrecord?

read any of the market wizards books