{"id":823,"date":"1972-09-07T00:01:45","date_gmt":"1972-09-07T07:01:45","guid":{"rendered":"https:\/\/www.kith.org\/pmjj\/?p=823"},"modified":"2022-07-03T14:19:43","modified_gmt":"2022-07-03T21:19:43","slug":"1972-september-7-compound-interest-calculations-from-peter","status":"publish","type":"post","link":"https:\/\/www.kith.org\/pmjj\/1972\/09\/07\/1972-september-7-compound-interest-calculations-from-peter\/","title":{"rendered":"1972, September 7: Compound-interest calculations from Peter"},"content":{"rendered":"\r\n

This \u201cletter\u201d consisted entirely of four pages of Peter manually calculating compound interest, apparently to show George and Helen how compound interest worked. I\u2019m a little bit surprised that George and Helen didn\u2019t already know about compound interest; they were both over 60 by this point, and had both dealt with plenty of practical financial matters in their own lives.<\/p>\r\n

I\u2019m not transcribing the numbers in these pages, though I am providing photos of the pages. But I\u2019ve transcribed most of the text annotations (see further down on this page, after the images).<\/p>\r\n

\"Interest<\/a>
Interest calculations, p. 1<\/figcaption><\/figure>\r\n
\"Interest<\/a>
Interest calculations, p. 2<\/figcaption><\/figure>\r\n
\"Interest<\/a>
Interest calculations, p. 3<\/figcaption><\/figure>\r\n
\"Interest<\/a>
Interest calculations, p. 4<\/figcaption><\/figure>\r\n

The first page is on lined 3-hole-punched paper. The other three are on unlined paper, written on the backs of mimeographed copies of a \u201cNational Peace Poll\u201d ballot, which asks: \u201cShould Congress bring the war to an end by cutting off the funds?\u201d<\/p>\r\n

Transcriptions of the bits of text:<\/p>\r\n

\r\n

Heading for page 1:<\/span> depositing $100 at end of each month compounded<\/u> (at 5.75% per anum)<\/p>\r\n

P. 1 shows the results of compounding monthly, quarterly, semiannually, and annually.<\/span><\/p>\r\n

you get a little more interest when it\u2019s compounded more often\u2026 but not much difference\u2026<\/p>\r\n

if you need information about compounding interest quarterly or semiannually, consult a friendly stockbroker with handy tables\u2026*<\/p>\r\n

Corresponding footnote, on p. 3:<\/span> * or go to the library & look up some accounting tables: it\u2019s called \u201camount of $1 per period\u201d\u2026<\/p>\r\n

Note at end of p. 1, about the compounding numbers:<\/span> so by the 23rd<\/sup><\/u> year, you\u2019d have doubled your money\u2026<\/p>\r\n

P. 2 shows some calculations, and the following text:<\/span><\/p>\r\n

the guy at the bank was ignorant: there are tables (see, for example, \u201cAccounting & Economic Decisions,\u201d by Donald Corbin, Appendix B, \u201cThe Use of Interest Tables\u201d, Table 3, \u201cAmount of 1 Per Period\u201d\u2014\u2014which shows how much your account amounts to if you deposit $1 a year and it\u2019s compounded annually at 6% (=$533.13 after 60 years!) but doesn\u2019t show $100\/mo. compounded at 5 3\/4%\u2014\u2014so I worked it out myself\u2026<\/p>\r\n

P. 3 is mostly calculations, plus the footnote mentioned above. Also some differences and 2nd differences between succeeding interest rates, with this note:<\/span> negative second differences probably indicate mistakes in computation\u2026<\/p>\r\n

Finally, p. 4 is also almost entirely calculations, plus one last bit of text:<\/span><\/p>\r\n

O what a grind i am\u2026 & the weird part is\u2014\u2014i actually enjoy<\/u> turning on the inner computer & watching it churn out this stuff\u2026<\/p>\r\n<\/blockquote>\r\n\n","protected":false},"excerpt":{"rendered":"

Peter demonstrates how compound interest works, in great detail.<\/p>\n","protected":false},"author":5,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[4,13],"tags":[],"class_list":["post-823","post","type-post","status-publish","format-standard","hentry","category-from-peter","category-awareness-house"],"acf":[],"_links":{"self":[{"href":"https:\/\/www.kith.org\/pmjj\/wp-json\/wp\/v2\/posts\/823","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.kith.org\/pmjj\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.kith.org\/pmjj\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.kith.org\/pmjj\/wp-json\/wp\/v2\/users\/5"}],"replies":[{"embeddable":true,"href":"https:\/\/www.kith.org\/pmjj\/wp-json\/wp\/v2\/comments?post=823"}],"version-history":[{"count":8,"href":"https:\/\/www.kith.org\/pmjj\/wp-json\/wp\/v2\/posts\/823\/revisions"}],"predecessor-version":[{"id":849,"href":"https:\/\/www.kith.org\/pmjj\/wp-json\/wp\/v2\/posts\/823\/revisions\/849"}],"wp:attachment":[{"href":"https:\/\/www.kith.org\/pmjj\/wp-json\/wp\/v2\/media?parent=823"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.kith.org\/pmjj\/wp-json\/wp\/v2\/categories?post=823"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.kith.org\/pmjj\/wp-json\/wp\/v2\/tags?post=823"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}