Today's growth: compound interest by feel
Today's growth
You put 38500 away once and leave it alone. It earns 2.8 per cent a month, month after month, for 72 months. How much is there at the end?
Estimate it, do not calculate it: anything within 15 per cent counts as right. When the round ends the curve appears, and with it the straight line your instinct probably drew.
Yesterday's answer276291.03
How does Today's growth work?
One amount is put away once and left alone at a monthly rate for a number of months. You estimate what is there at the end, and anything within 15 per cent counts as right.
You get four tries. Everyone gets the same situation today and it changes at midnight UTC.
Why is a rough answer good enough?
Because the point is the size, not the cents. Asking for the exact figure would be asking you to raise a number to the power of sixty in your head.
What is the drawing at the end?
The green curve is what compound interest actually does. The dashed straight line is what the same rate would give if the interest never earned interest, which is the shape most people picture. The dotted line is your best guess.
It only appears once the round is over, because the last point of the curve is the answer.
Why are the numbers never small?
Because the situations are filtered so the compound result beats the straight line by at least a quarter. With a low rate over a few months the two lines sit on top of each other on the screen and the whole point disappears.
Is this financial advice?
No. There is no product, no institution and no recommendation here, only arithmetic on numbers that were invented for the puzzle.