Compound interest

Discussion in 'The Cesspool' started by IncogNegro, Jun 11, 2013.

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  1. IncogNegro Banned Banned

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    Let's say we want to have 100,000 dollars by tomorrow, how much do we need today if we compound our interest at light speed over a whole year with current market values applied?

    so

    100,000=x\( (1+ \frac{.12}{365})^2\)
     
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  3. rpenner Fully Wired Valued Senior Member

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    If you mean you want to have $100,000 a year from now, how much would you need to invest today at 12% compounded daily.
    \(10^5 = \left( 1 + \frac{12}{36500} \right)^{365} x\) with solution \(x = 10^5 \left( 1 + \frac{12}{36500} \right)^{-365} \approx 88693.7928\)

    So even though $88,693.79 rounds up to $100,000 after a year, $88,693.80 rounds down to $100,000 and is what in practice you would want to invest if that last penny matters.

    If you want to have $100,000 a year from now, how much would you need to invest today at 12% compounded continuously:
    \(10^5 = e^{\tiny \frac{12}{100} } x\) with solution \( x = 10^5 e^{\tiny -\frac{12}{100} } \approx 88692.0436\) which is a little better ($1.75) for you.
     
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  5. IncogNegro Banned Banned

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    \(1000(1+ \frac{.12}{(\frac{9000000000000}{365})})^{(\frac{9000000000000}{365})}=1128.424 1000(1+\frac{.12}{365})^{365}=1127.475 \)

    I got a dollar! I got a dollar! I got a dollar HEY HEY HEY HEY!

    Sooo.... What's half of an extra 1 one thousandth of every dollar in compound interest?

    nine trillion kilometers is the distance a photon travels away from your dollar in a year. Too bad you don't get those photons back....
     
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  7. Pete It's not rocket surgery Registered Senior Member

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    Hi IncogNegro,
    I suspect you're just trolling for a few lulz, but anyway...

    "Compound our interest at light speed" doesn't mean anything.
    Also, how are you going to get $100,000 tomorrow, if your investment is over a year?
    It's really not clear what you're asking.

    This is the formula for the return after a year of an investment earning 12% per annum compounded daily.
    As rpenner showed, this means that investing $88692.80 at 12% p.a., compounded daily, grows to $100,000 a year later.


    This shows that investing $1000 for a year at 12% p.a. compounded daily returns $1128.42

    This shows that compounding more frequently than daily doesn't make much difference, specifically compounding every 5.4 microseconds (the time it takes light to travel a mile), only adds $1.05 to the return after a year on your $1000 investment.

    This is because (as rpenner showed), now matter how frequently you compounded the interest, there is a maximum at the continuous growth rate, which is:
    \(1000 e^{0.12} = 1127.497\)

    I don't understand this question. Is it genuine, or are you just looking for laughs?]
     
  8. IncogNegro Banned Banned

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    I'm not really looking for laughs... Tho a lot of serious shit ends up being pretty funny...

    Not here now. We could justifiably and undeniably find a rate for the government to distribute in order to replace what is found between your shoelace. But so many still detest the idea in request, it is not fixing one small thing and adding intrest to it. It's finging out how to give something undefined.

    The equation and it's relations have a generous many applications. some I am aware of, some I feel I am not.

    Some only certain people can receive...

    The idea is adding distance over time in the application of "interest" in order to receive the error between rounding up instead of loosing it between our extremes of low and high values. -wow freaky fight or flight mode-reason for editing-had to try and say something intelligent... Ahh hamartia
     
  9. gmilam Valued Senior Member

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    Compound interest at light speed... and you wonder why no one takes you seriously.
     
  10. IncogNegro Banned Banned

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    Ok. If I can be completely honest here. Please.

    Math is the hardest part about functioning in society. Einstein lost physical functions in his body. Socrates thought he ruled society. Neitzsche gave up way before the rest of them.... I can't possibly conceive of any functionality in any person a decreasing quality. And this is hopefully a purely objective thought based on the statistical ability to recreate something original that somehow pertains to everyone at some level. And this is what we all do. Just create our own extreme that everyone seems to understand really well.- I mean we put our own lives into anything we type..?
     
  11. Russ_Watters Not a Trump supporter... Valued Senior Member

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    Are you using a translator program or playing Mad Libs?
     
  12. AlexG Like nailing Jello to a tree Valued Senior Member

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    It's just the way he trolls.
     
  13. IncogNegro Banned Banned

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    Wait... I'm away from my graphing calculator... How much intrest off 1,000 do we get for 100% compounded this way?
     
  14. Russ_Watters Not a Trump supporter... Valued Senior Member

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    Pi divided by placenta.
     
  15. IncogNegro Banned Banned

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    That is some very interesting math....
     
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