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# Stange question about compounding interest

Discussion in 'Professional Trading' started by lasner, Sep 25, 2011.

1. ### lasner

Is a 900% return the same as a 30% return for 30 years. It's the same amount right it equals 900%. 30% for 30 years.

Will you get the same return if you make a 900% in 1 year as you would with a 30 year 30% return each year.

2. ### lasner

The answer that I get is no. I turned \$368 into \$7,000. That's a 2,000 percent return. If I had made a 2,000 percent return over 30 years at 60% per year it would have turned into 2 billion bucks!

Compounding interest SUCKS!!!!!!! I WANT MY 2 BILLION DOLLARS, I've been cheated by compounding interest!

3. ### TheGoonior

Not sure where you get 2 billion since \$768 compounded at 30% annually is about 2 million dollars.
It's not an "apples-to-apples" comparison, anyway.

5. ### Maverick74

~2 bill.
Incidentally, there's a simple equation to get the results.
p0*(1+rtn)^nyr
here,
368*(1+.6)^33 ~ 2e9

30yrs would get you to around 1/2 bil (as long as we're dreaming).

7. ### heech

I ended up with \$2 billion as well.

1.6^33 = 5,444,517. So, you'll multiply your starting value by 5 million.

In any case... this is a really silly thread.

8. ### Maverick74

Where are you getting 60% from? He is using 30% per year.

9. ### Maverick74

You can do the math in your head in 10 seconds using the rule of 72.