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| Math Central | Quandaries & Queries |
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Subject: Doubling money Take $.01 and double it every day for 30 days. How many dollars would you have? Thank you so much |
Hello Pat. I always hear about kids getting their parents to agree to this for their allowance - poor parents!
On the first day, you have $0.01.
On the next day, you have $0.01 x 2.
On the next day, you have $0.01 x 2 x 2.
and so on...
On the nth day, you have $0.01 x 2n-1.
So on the 30th day, you have $0.01 x 229 = $5 368 709.12
That's the power of compound interest! It is equivalent to 100% interest per day paid daily. On even a penny as your initial investment, it climbs immediately to unfathomable heights!
Stephen La Rocque.>
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