Money and interest is the representation of what?

Question

I´m confused: imagine that my great-great-great grandfather opened a bank account with weight in gold valued then at $1,000.00 and let it untouched with a compound interest until today...(the bank and account still exists) what would the actual principal represent nowadays? If I want to change it back to gold would there be enough to do so?

Answer 1

I think bank would go bankrupt, or you would become an owner of this bank. gold amount would at least triple for say 200 years, but it's weight of gold - you should also include increase in value per ounce of this gold.

For instance if annual interest rate would be 5% and initial weight of gold was 500 tons then at the end you would have now 8.2 million tons of gold.

Year....Weight (kg)

1....500 000

2....525 000

3....551 250

4....578 813

5....607 753

6....638 141

7....670 048

8....703 550

9....738 728

10....775 664

11....814 447

12....855 170

13....897 928

14....942 825

15....989 966

16....1 039 464

17....1 091 437

18....1 146 009

19....1 203 310

20....1 263 475

21....1 326 649

22....1 392 981

23....1 462 630

24....1 535 762

25....1 612 550

26....1 693 177

27....1 777 836

28....1 866 728

29....1 960 065

30....2 058 068

31....2 160 971

32....2 269 020

33....2 382 471

34....2 501 594

35....2 626 674

36....2 758 008

37....2 895 908

38....3 040 703

39....3 192 739

40....3 352 376

41....3 519 994

42....3 695 994

43....3 880 794

44....4 074 833

45....4 278 575

46....4 492 504

47....4 717 129

48....4 952 986

49....5 200 635

50....5 460 667

51....5 733 700

52....6 020 385

53....6 321 404

54....6 637 474

55....6 969 348

56....7 317 815

57....7 683 706

58....8 067 892

59....8 471 286

60....8 894 850

61....9 339 593

62....9 806 573

63....10 296 901

64....10 811 746

65....11 352 334

66....11 919 950

67....12 515 948

68....13 141 745

69....13 798 832

70....14 488 774

71....15 213 213

72....15 973 873

73....16 772 567

74....17 611 195

75....18 491 755

76....19 416 343

77....20 387 160

78....21 406 518

79....22 476 844

80....23 600 686

81....24 780 721

82....26 019 757

83....27 320 744

84....28 686 782

85....30 121 121

86....31 627 177

87....33 208 536

88....34 868 962

89....36 612 410

90....38 443 031

91....40 365 183

92....42 383 442

93....44 502 614

94....46 727 744

95....49 064 132

96....51 517 338

97....54 093 205

98....56 797 865

99....59 637 759

100....62 619 647

101....65 750 629

102....69 038 160

103....72 490 068

104....76 114 572

105....79 920 300

106....83 916 315

107....88 112 131

108....92 517 738

109....97 143 625

110....102 000 806

111....107 100 846

112....112 455 888

113....118 078 683

114....123 982 617

115....130 181 748

116....136 690 835

117....143 525 377

118....150 701 646

119....158 236 728

120....166 148 565

121....174 455 993

122....183 178 792

123....192 337 732

124....201 954 619

125....212 052 350

126....222 654 967

127....233 787 715

128....245 477 101

129....257 750 956

130....270 638 504

131....284 170 429

132....298 378 951

133....313 297 898

134....328 962 793

135....345 410 933

136....362 681 480

137....380 815 554

138....399 856 331

139....419 849 148

140....440 841 605

141....462 883 685

142....486 027 870

143....510 329 263

144....535 845 726

145....562 638 013

146....590 769 913

147....620 308 409

148....651 323 829

149....683 890 021

150....718 084 522

151....753 988 748

152....791 688 185

153....831 272 595

154....872 836 224

155....916 478 036

156....962 301 937

157....1 010 417 034

158....1 060 937 886

159....1 113 984 780

160....1 169 684 019

161....1 228 168 220

162....1 289 576 631

163....1 354 055 463

164....1 421 758 236

165....1 492 846 148

166....1 567 488 455

167....1 645 862 878

168....1 728 156 022

169....1 814 563 823

170....1 905 292 014

171....2 000 556 615

172....2 100 584 446

173....2 205 613 668

174....2 315 894 351

175....2 431 689 069

176....2 553 273 522

177....2 680 937 198

178....2 814 984 058

179....2 955 733 261

180....3 103 519 924

181....3 258 695 920

182....3 421 630 717

183....3 592 712 252

184....3 772 347 865

185....3 960 965 258

186....4 159 013 521

187....4 366 964 197

188....4 585 312 407

189....4 814 578 027

190....5 055 306 929

191....5 308 072 275

192....5 573 475 889

193....5 852 149 683

194....6 144 757 168

195....6 451 995 026

196....6 774 594 777

197....7 113 324 516

198....7 468 990 742

199....7 842 440 279

200....8 234 562 293

Answer 2

Cesar, my intuition said you will receive a half, but enough.