At what interest rate, compounded annually, would 1/1,000,000 of 1 cent be worth 1 penny in 1,000 years from now? Serious question given by our Math teacher to see if we understand compound interest! Thanks for help.

Guest Nov 7, 2018

#1**+2 **

FV = PV (1+i)^n

1 = 1x10^-6 (1+i)^1000

1/1x10^-6 = (1+i)^1000

10^6 = (1+i)^1000 take log of both sides

6 = 1000 log(1+i)

6/1000 = log (1+i) raise 10 to both sides

10^(6/1000) = 1+i

i=1.3911%

ElectricPavlov
Nov 7, 2018