@JaMoond once again, i could have picked any interest rate ( as i say in the video). the point is not what interest rate you get, the point is how time makes an impact.
@Basram thx for your comment. the video talks about yearly deposit so the year future value is $2.03 after 2 deposit of one dollar. If in year one you get a FV of $1.01 (being plus 1%), the next year you would get 1% on $1.01 which is our $1.0201 I agree. But because you also deposit $1 in year 2 and get interest after year 2 finishes, you have 1.0201+1.01=2,03. Apparently there is an additional option in Excel for the FV. This makes the difference between the 2.01 and the 2.03.lovely function
Great illustration of the importance of saving :) the interest is somewhat instable now though. Have you ever thought about buying/selling on the stock market?
@deeppurple28 ah well, the video has only been up for a couple of days. a couple of thousand of views is not bad i think! (for a math video, at least!)
@iFromBelgium Your calculations are incorrect. 1% interest rate (annuity) on 1 dollar for 2 years equals 1.0201$. Do you mean that you deposit one additional dollar each year? In that case, you get interest on all your saving, buy only depending on how long you have had them in the bank. The interest doesn't tick at 1% seconds before new years eve, it is an estimate of the average value calculated from that years monthly growth combined.
@HelloIAmDaniel thanks that's great. I read something about these geometric series in my algebra II book (the Dummies series). I wish internet and youtube existed when I was studying. I'm learning everything again for a challenge. Math isn't boring anymore. it becomes useful and fun :D. Thanks to @patrickjmt too
@patrickjmt Hi so I did a little exercise with 2 years, 1% rate and and 1 $. With your formula I get $2.03. With Excel I get $2.01 (how cheap). What it seems like is that in Excel, my first year gets a FV of $1.01 while there is no interest calculated on the second year (1.01+1=2.01). With your formula we give additional interest on the deposit of year one and 2...YOUR FORMULA IS MORE ADVANTAGEOUS :D. Sorry if I spammed you, just saying
inflation, risk of dying, more experience in future, falling utility function, even out spedning over life etc. the way goverments around the world destroys savings most people are better off enjoying their purchasing power while they can....
I really like your video's. Could you explain how the formula for future value is calculated. I'm ok with the compound part...but have no clue for the division thing and why we do times 1,05 again at the end.
@HelloIAmDaniel & @patrickjmt ah yes. why do we multiply by 1, 05 again in the end.. I plugged in the numbers in excel and the FV function is the one without those final 1,05
You helped me 4 years ago in my math class.
Now you're helping me in life!
YOU'RE SO USEFUL!!! :D
Not only are a great math teacher, but also a financial advisor. Math Powerr!
@JaMoond once again, i could have picked any interest rate ( as i say in the video). the point is not what interest rate you get, the point is how time makes an impact.
thank you for the videos Patrick...i'm sure i'll be coming here a lot this year and next year...you know when my teacher starts talking Chinese again.
@Basram thx for your comment. the video talks about yearly deposit so the year future value is $2.03 after 2 deposit of one dollar. If in year one you get a FV of $1.01 (being plus 1%), the next year you would get 1% on $1.01 which is our $1.0201 I agree. But because you also deposit $1 in year 2 and get interest after year 2 finishes, you have 1.0201+1.01=2,03. Apparently there is an additional option in Excel for the FV. This makes the difference between the 2.01 and the 2.03.lovely function
@Basram yep! i have.
@MetaIhead89 that is great idea. i guess you have not been paying attention to how gold has been plummeting the past week or so.
thanks for this video this is even more motivation for me to save money now lol.
@HRRyan2 dow jones has average return of abot 10.8% since 1930. and once again, read the comments in the video. i picked an interest rate at random.
Great illustration of the importance of saving :) the interest is somewhat instable now though. Have you ever thought about buying/selling on the stock market?
thank you, great video!
@deeppurple28 ah well, the video has only been up for a couple of days. a couple of thousand of views is not bad i think! (for a math video, at least!)
@iFromBelgium Your calculations are incorrect. 1% interest rate (annuity) on 1 dollar for 2 years equals 1.0201$. Do you mean that you deposit one additional dollar each year? In that case, you get interest on all your saving, buy only depending on how long you have had them in the bank. The interest doesn't tick at 1% seconds before new years eve, it is an estimate of the average value calculated from that years monthly growth combined.
@HelloIAmDaniel thanks that's great. I read something about these geometric series in my algebra II book (the Dummies series). I wish internet and youtube existed when I was studying. I'm learning everything again for a challenge. Math isn't boring anymore. it becomes useful and fun :D. Thanks to @patrickjmt too
@patrickjmt Hi so I did a little exercise with 2 years, 1% rate and and 1 $. With your formula I get $2.03. With Excel I get $2.01 (how cheap). What it seems like is that in Excel, my first year gets a FV of $1.01 while there is no interest calculated on the second year (1.01+1=2.01). With your formula we give additional interest on the deposit of year one and 2...YOUR FORMULA IS MORE ADVANTAGEOUS :D. Sorry if I spammed you, just saying
inflation, risk of dying, more experience in future, falling utility function, even out spedning over life etc.
the way goverments around the world destroys savings most people are better off enjoying their purchasing power while they can....
@JaMoond inflation has nothing to do with this. if you put the money in a jar, you'd have less. end of story.
I really like your video's. Could you explain how the formula for future value is calculated. I'm ok with the compound part...but have no clue for the division thing and why we do times 1,05 again at the end.
@anticorncob6 maybe, i get tired of reading comments from all the trolls though
There's a cute xkcd on compound interest he did in the last few days.
Thanks for sharing bro.. godbless.
CAN YOU PLEASE GIVE US A MATH DEBATE THING AGAIN LIKE YOU DID WITH 48/2(9+3)?
@HelloIAmDaniel & @patrickjmt ah yes. why do we multiply by 1, 05 again in the end.. I plugged in the numbers in excel and the FV function is the one without those final 1,05
@Basram Do you have any good reads to learn about how to buy/sell on the stock market?
@heltok lol
@FreddoX1 ha : )
errrm inflation anyone?
@HRRyan2 My bank account in Australia returns 6.3%.