John lanchester here provides the tin-opener to the money men’s can of worms. The most memorable of his facts (listed in alphabetical order) comes under S for “Seventy-Two”. How long will it take you to double your money by compound interest? Simply divide 72 by the rate of interest. If it’s 6 per cent, it’ll take 12 years. Contrariwise, you can use the magic number to work out how long inflation will take to halve the value of your savings. Hmm, not so consoling.Earlier in the book there is another amusing entry on compound interest. The Indians who sold Manhattan to Peter Minuit in 1626 did so for some beads and trinkets worth, say, US?$26. If those Indians had been in a position to invest the $26 at 8 per cent interest (which Lanchester assures us is by no
30 December 2014, The Tablet
How to Speak Money
It makes the world go round but it doesn’t make sense
Get Instant Access
Continue Reading
Register for free to read this article in full
Subscribe for unlimited access
From just £30 quarterly
Complete access to all Tablet website content including all premium content.
The full weekly edition in print and digital including our 179 years archive.
PDF version to view on iPad, iPhone or computer.
Already a subscriber? Login