If you had invested 0.01 of a dollar at the time of the birth of Jesus,with a compound interest of 5%, it would have a value todayof the number of pure gold balls, each the size of the Earth, shown below:
Don't believe it?No need to use a formula, with a simple trick you can mentally reconstruct the exponential nature of compound interest.Take one cent:A cent doubles every 15 years with a 5% interest rate, making 2 cents.That means that every fifteen years your assets double, this gives:30 years: 4 cents45 years: 8 cents60 years: 16 cents75 years: 32 cents90 years: 64 cents105 years: 128 cents135 years: 512 cents150 years: 1000 cents(figures have been rounded for simplicity)So we can see that every 150 years there is a thousand-fold increase in cents, and a further 150 years there will be another thousand-fold increase, making a total of one million cents.The equation is simple:150 years: one thousand cents300 years: one million cents450 years: one billion cents600 years: one trillion centsAfter 600 years you will have 10 billion dollars in your bank account,and that's not bad is it?And after another 600 years? Simple, just multiply by a factor of one trillion.That is 10 billion trillion dollars after 1200 years.And after 1800 years: 10 billion trillion trillion.Or in gold terms, 312 trillion trillion tons, equal to 52 times the weight of the Earth.And in another 150 years it will be 52,000 times the weight of the Earth, and so on, and so on . . .
This is how Asset growth of 0.01 dollar invested with a 5% compound interest rate:By years in dollars:15: 0.0230: 0.0470: 0.30150: 15.07200: 172.92250: 1983378: 1,022,245 (over a million dollars)500: Over 39 billion (and a few cents :)Now take a ton of gold with a price of 32,000 dollars per kilo:500: 12600: 1615800: 27,944,0451000: 483,224,662,7281200: 8,356,201,532,115,3671400: 144,500,290,301,869,906,2501618: The gold is now heavier than the weight of the Earth.(The Earth weighs 6 million trillion tons)1653: 5.5 times more than the weight of the Earth, or a gold ball the same size as the Earth.And now the equivalent of Earth sized gold balls:1800: 1309 gold balls.2000: 22,643,013 gold balls.2015: 47,073,198 gold balls.And that makes 9,038,054,016,000,000,000,000,000,000,000,000,000,000 dollars.Or more than 9 billion trillion trillion dollars.Divided among 7.5 billion people this would give every one ofthem one million trillion trillion dollars.That would even make Bill Gates green with envy.....
'It is well that people of the nation do not understand our banking and monetary system, for if they did, I believe there would be a revolution before tomorrow morning.' (Henry Ford)