Compare that to interest you might have received from your local bank. Example = 10% interest at a bank per year :
2014 - $7.48 = {$0.748}
2015 - $8.23 = {$0.823}
2016 - $9.05 = {$0.905}
2017 - $9.96 ---> rounded off = $10-00 <---- The reality will be that banking fees would have been more.
My math may be incorrect, but it is close enough to make a good comparison. It would never trump $48.14 interest over 3 years vs $7.48. I can
just imagine if this was $1 000 000
2014 - $7.48 = {$0.748}
2015 - $8.23 = {$0.823}
2016 - $9.05 = {$0.905}
2017 - $9.96 ---> rounded off = $10-00 <---- The reality will be that banking fees would have been more.
My math may be incorrect, but it is close enough to make a good comparison. It would never trump $48.14 interest over 3 years vs $7.48. I can
just imagine if this was $1 000 000
10% is a big profit annually and only found in countries which have a very high inflation rate (as far as I know). your calculations are not wrong but they are just not accurate.
for example the banks where I live calculate the profit daily, they pay the profit monthly though. and for that your calculation would be a little bit off. the total after 3 yeas would be $10.10 exactly if you use the daily method. the formula for it can be found in Microsoft Excel if you are interested.
Code:
=FV(10%/365,3*365,0,-7.48)
:
