Difference Between:
(1.00)365 = 1.00
(1.01)365 = 37.7
Answers
Answer:
Step-by-step explanation:
It both makes sense and it doesn’t:
It’s probably not real-world feasible to do 37x your ‘ordinary’.
This is actually phrased slightly wrong—and the difference is huge. I’ll explain.
The math roughly makes sense. It’s basically presented as a compounding interest calculation:
(1+.01)365−1=36.78
But that is really asking how much you’ve “got” on the last day. That is, on day 365, you will be “doing” almost 37x what you did on Day 0. And that doesn’t quite fit this situation. See, with a savings account, everything you had in the intermediate year doesn’t matter—only your balance at the end. When you’re talking about what you’ve “done” over the whole year, every day matters.
So, the statement is really about what you’ve accumulated over an entire year by doing 1% more each day. And for this, you’ll need calculus (well, it just makes it easier):
∫3650(1+.01)xdx=3696.7
To be clear, that’s a whopping 369,670%. Not a piddly 3800%.
Alright, gut check:
Is it feasible that you can do 369,205% better by doing 1% more each day for a year? Absolutely not. Reality abhors exponential growth.
The point of the statement is to illustrate that a little change can make a big difference over time.
Answer:
Step-by-step explanation: