Investment Math Question.?

Question

I would prefer to learn how to do this rather than just an answer, or if there is a website. Here's the problem. How much money would I have if I invest $1000 monthly and that goes up 10% weekly?

Answer 1

Spend $20 at Office Depot and buy a financial calculator.  I would recommend a TI BA-II Plus, as it's the simplest to learn.

Answer 2

The answer "$1,000(1 + .10) to the 52nd power" is not correct since it ignores all the monthly deposits after the initial deposit.

You can calculate the amount that each monthly deposit would become with the formula

$1,000 x (1.10 ^ (52 x M/12))

where M the number of months remaining at the time the deposit is made.

To reduce the number of steps to get an answer I am going to reduce the time period to 6 months. At the end of six months you would have

$1,000 x (1.10 ^ (26 x 6/6)) = $11,918 +

$1,000 x (1.10 ^ (26 x 5/6)) = $7,886 +

$1,000 x (1.10 ^ (26 x 4/6)) = $5,218 +

$1,000 x (1.10 ^ (26 x 3/6)) = $3,452 +

$1,000 x (1.10 ^ (26 x 2/6)) = $2,284 +

$1,000 x (1.10 ^ (26 x 1/6)) = $1,511

or $33,042

Over the next 6 months that amount will grow by 10% a week and become

$33,042 x (1.10 ^ 26) = $393,800

You would also have another $33,042 from the additional $1,000 deposts made in the second six months, making your total holdings

$393,800 + $33,042 = $426,842 at the end of one year.

Once you have these figures you can calculate other time period in a relatively small number of steps. For example, after 10 months you would have

$ 33,042 + $5,218 x (1.10^26) =  $95,231

after 2 years you would have

426,842 ^ 52 + 426,842 = $61,056,731

or after 4 years you would have

$61,056,731 ^ 104 + $61,056,731 = $1,231,953,542,066

Answer 3

To begin, if you're earning 10%/wk I'd love to know how!

Ok, as for the question....it's much easier on a calculator but one way to solve it is something like this.

You invest $1000.  You earn 10% the 1st week so by the end of that week you have $1100.  (1000x.10=$100 interest).  Your principal was $1000, your earned interest is $100.  You now have $1100.

The second week would look like this.  

Principal:  $1100

Interest earned:  ($1100 x .10)= $110

Total value:  $1100 + $110= $1210

The 3rd week's interest is $121.

Value in 3rd week is $1210 + $121 = 1320

So on and so forth.

An easy way of calculating in your head is to just drop off the last digit.  What remains is your interest earned.  Add that to the principal and there's you new value!

Answer 4

Jeff410 is correct.  

http://en.wikipedia.org/wiki/Future_valu...

Answer 5

Its a future value problem

Future Value = $1,000(1 + .10) to the 52nd power

Thats the amount you would have at the end of one year.