1 penny compounding for 1 month

papaw · #1 Jun 29, 2007, 11:53 AM

About 20 yrs ago I saw a one page piece...it described explained that you were offered a job which would last 30 days and you could choose between one of two methods of payment.

The first was to be paid $100,000.

The second was to be paid 1 penny the first day, 2 pennys the second day, 4 pennys the next day, 8 pennys the next day...with the number doubling each day for the month.

Which pay option to take?

The bottom line was that if you took the penny which compounds for one month would equal over $1 million dollars.

Does anyone out there have that illustration?

Thanks!!

michealb · Jun 29, 2007, 12:02 PM

Google searched for "penny compounding"
USATODAY.com - Compounding is the key

Aurora4Homes · Oct 25, 2007, 03:30 PM

Quote:

Originally Posted by papaw

About 20 yrs ago I saw a one page piece...it described explained that you were offered a job which would last 30 days and you could choose between one of two methods of payment.

The first was to be paid $100,000.

The second was to be paid 1 penny the first day, 2 pennys the second day, 4 pennys the next day, 8 pennys the next day...with the number doubling each day for the month.

Which pay option to take?

The bottom line was that if you took the penny which compounds for one month would equal over $1 million dollars.

Does anyone out there have that illustration?

Thanks!!

I saw this same example shown as a compounding method, to show the power of compounding. You may want to look the link and change to how you see fit.

USATODAY.com - Compounding is the key



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