Compounding quiz

Are you good in maths?

 

I'm not good at math, I'll be the first to tell you. (i'm kind of extreme right brain) -- but I'm still a good trader. I just lay the somewhat philosophical foundation wisdom down...and the rest takes care of itself.
(but the answer is 1,000%, correct...?)

 

The question is worded in such a way as to be ambiguous. Is it 300% for the first 6 months, then another 300% for the second 6 months to complete the year. If so, none of these answers would be correct.

 

6th root of 4 = 1.2599 (25,99% per Month)
1.2599^6 = 4 (300%) 1.2599^12 = 16 (1500%)

 

You make 300% in the first 6 months, and continue with the same performance rate till year's end...

 

From something (x)
Compounded for 6 months (x^6)
You get 300% (x^6=4). Solve for x
Then extrapolate to 12 months.

 

I use this formula:
100 * (1 + p/100)^n - 100
where p is the percentage (here 300), and n=number of intervalls (here 2 because there are two 6-months in a year).
I'm getting 1500%.

 

Wow. Don't know how you found it.
Is it yours ? If so, well done.
Looks like it works =P

 

It's actually a form of this compound interest formula:
https://en.wikipedia.org/wiki/Compound_interest#Compound_interest

But the result really surprised me, and that was the motivation to make quiz out of it.

 

Okay. I concur, exponential return is impressive.