March 29, 2023

What is compound interest, the mathematical “snowball” that the super-rich profit from

  • author, Dahlia Ventura
  • roll, BBC News World
Illustrative image,

They are behind calculating revolving credit card and loan installments

If you could choose between receiving an instant cash payment of $1 million or a “magic” cent that doubles every day for 30 days, which alternative would you choose?

Since you have read the question in the context of this article, you may suspect that the answer is not very clear.

If that offer came out of nowhere, the lure of a million dollars could be much greater than a penny, no matter how charming. After all, even if it doubles the next day, we’re only talking about two cents.

But if the calculation is done for a total of 30 days from the original assumption… that’s amazing: by then you’ll have over $5 million USD.