Search This Blog

Friday, September 19, 2014

Repost: "$10mil or penny doubled 30 days- Which is more?"

~ US penny circa 1900 with a Redskin on the front..

Its Friday... End of a long week and not much to be inspired by..

Certainly not much if anything of importance to write about other than the Scotland Independence vote and I have a bad feeling the 'No' votes will win the day

Ebola. ISIS and the rest of that scary muck can wait for another day..
~ Replica of Confederacy penny - 1861

And at A&G we pride ourselves at not writing for the sake of writing when there's little to nothing going on to inspire us..

So instead I will re-post one of the most popular postings in our 4+ years in existence..

"$10mil or penny doubled 30 days- Which is more?"

Enjoy..
_________________________________
When yours truly was younger, to demonstrate value of money and lack of understanding most have about it, I was posed a situation:

I would take on a job for 31 days and the boss would offer me two choices how I was be paid.

The first choice is to take a lump sum payment of $10 million dollars after 31 days.

The second choice is to accept 1 penny for the first day of work, but the salary would continuously double each subsequent day and I would get paid the total amount at the end of the work period  (2 cents paid on day 2;  4 cents paid on day 3, etc)?
~ $10 million dollar Zimbabwe note.. Equivalent to $27,600 US dollars

Most people would take the $10 million.  After all, it averages $333k/day or $41,625 per work hour

But would that be the most financially sound choice?

Here's a day by day breakdown of wages doubled daily starting at a penny:
~ 1910 Lincoln "Wheat" penny; minted betw. 1909 - 1956

Day  1 -    0.01       a penny
Day  2 -    0.02       3 cents total
Day  3 -    0.04       7 cents earned in 3 days
Day  4 -    0.08       15 cents total
Day  5 -    0.16       31 cents earned after 5 days
Day  6 -    0.32       63 cents total
Day  7 -    0.64       $1.27 earned after 1 full week

~  Looks pretty bad- $10mill looks good..  Let's resume..

Day   8 -    1.28        $2.55 total
Day   9 -    2.56        $5.11 total
Day 10 -    5.12        $10.23 earned after 10 days
Day 11 -  10.24        $20.47 total
Day 12 -  20.48        $40.95 total
Day 13 -  40.96        $81.91 total
Day 14 -  81.92        $163.83 earned after 2 full weeks

~  That's better than after 1 week but nowhere near $10mil, hmm...

Day 15 -    163.84     $327.67 total  (halfway there)
Day 16 -    327.68     $655.35 total
Day 17 -    655.36     $1310.71 earned in 17 days
Day 18 -  1310.72     $2621.43 total
Day 19 -  2621.44     $5242.87 total
Day 20 -  5242.88     $10,485.75  total
Day 21 - 10,485.76   $20,971.51 earned in 21 days
~ This isn't looking too good.. gulp~  10 days to go

Day 22 -      20,971.52           $41,943.03  total
Day 23 -      41,943.04           $83,886.07  total
Day 24 -      83,886.08          $167,772.15 earned in 24 days
Day 25 -    167,772.16          $335,544.31 total
Day 26 -    335,544.32          $671,088.63 total
Day 27 -    671,088.64         $1,342,177.27 total
Day 28 -    1,342,177.28      $2,684,354.55 earned in 28 days
~  3 work days left.. looks promising...

Day 29 -   2,684,354.56       $5,368,709.11  total
Day 30 -   5,368,709.12     $10,737,418.23  total  (1 day left)
Day 31 -  10,737,418.24    $21,474,836.47

A penny, doubled each day for 31 days =  $21,474,836.47

Amazing how math works..