Wow, I pitty (don't pitty) my students

[kote]

Shouldn't it be 5.38 billion? It was 93 cents at a 2.25% interest rate, right?

Clearly you're forgetting the fees that were charged. Don't question Futurama.

 

[Leptos]

Clearly you're forgetting the fees that were charged. Don't question Futurama.

Makes sense then. Also, would it be correct to assume there would be indefinite inflation for 1000 years?

 

[kote]

Makes sense then. Also, would it be correct to assume there would be indefinite inflation for 1000 years?

How do you make an assumption of indefiniteness ? Over the course of 1000 years it's probably most likely that the US dollar will be replaced and his bank records will be lost or assets seized. For teaching about compounding interest, though, I think we can just extrapolate historical inflation rates (which have been above 2.25%).

 

[BobG]

Shouldn't it be 5.38 billion? It was 93 cents at a 2.25% interest rate, right?

Depends on whether the interest is compounded annually, monthly, or daily. I agree that compounding monthly would be more likely than annually, but the episode compounded the interest annually. (I don't think any savings accounts compound interest daily, but surely there's at least a few credit card companies that do.)

If it's any solace, I only compounded the inflation rate annually instead of daily.