ARGH! Need maths help!

[blamebrampton]

I was once good at maths.

I know I should know how to do this, but I cannot remember enough to see if my method is effective or not. I found a website that will let me punch in numbers and give me an answer, but I want to check it! So I am hoping that shocolate  or someone similarly gifted is up and about.

I start with $50. Every week, I add $50. I have a compounding interest rate of 9.96%. I compound it annually, or monthly (two results). What do I have at the end of 21 years?

More than happy to do all the actual working if someone can remind me of what the formulae are.

Comments

Re: Interest

[ewen]

PPS: The above assumes that you are getting 9.96% after tax, an even less believable situation. If your tax rate is, eg, 33% then the effective annual interest rate is closer to 6.6% and the totals will correspondingly be much smaller. Although typically the tax is only deducted when the interest is credited, not when it is compounded, so daily compounding with annual crediting can work out slightly better from this point of view. (If you're getting 9.96% interest after tax, at present, I'd be very cautious about the risk of the investment -- the chances of ending up with $0 would seem noticeably high.)

Ewen

Re: Interest

[blamebrampton.livejournal.com]

HEE! Yes, totally unreal world ;-) It's basically looking at what a real-world investment with regular inputs would have done if invested in the ASX 21 years ago.

The last time I did anything like this, I proved that you would have been about $10 billion richer if you followed one particular financial adviser for 30 years. Of course, he was the little columnist who turned up for work on the train and wore a nice hat but old jacket, because he could only be happy investing in things he didn't know anyone on the board of ...