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295 years at 4% yields 105,885 times the principal [1]. The income value of £1 in 1720 was equal to £2,271 in 2013 [2]. Therefore the investment yielded only 4
by mleonhard 12y ago
295 years at 4% yields 105,885 times the principal [1].
The income value of £1 in 1720 was equal to £2,271 in 2013 [2]. Therefore the investment yielded only 4,700% over 295 years.
[1] http://www.moneychimp.com/calculator/compound_interest_calculator.htm http://www.moneychimp.com/calculator/compound_interest_calcu...
[2] http://www.measuringworth.com/ppoweruk/ http://www.measuringworth.com/ppoweruk/
- Marazan 12y agoYou don't get the interest compounded though, this isn't a bank account, it's payment on a bond. You'd have to find other south sea bubble bond holders to sell you their bonds (which would only be done in whole units, you wouldn't be able to dribble in your 4% every year) to get the compound effect. Basically you look at the interest paid over the whole issue yearly and linear sum it, not apply a compound interest calculation.
- mleonhard 12y agoThanks for explaining this.