As economists are wont to do, we must make an assumption.
First, we assume a time machine...
A couple of minutes ago I heard an interesting tidbit on Talk of the Nation (on WHYY 90.9 on your FM dial). David Gardner, co-founder of The Motley Fool, mentioned that when Ben Franklin died, he had left a tidy some of money to the city of Philadelphia. Gardner, using this to illustrate the amazing phenomenon of compounding interest, said that if the city had just invested the money and not touched it, allowing it to compound annually at an average rate of 10 percent, Philadelphia would now have more than enough money to "buy the entire United States of America." Hence, the power of compounding interest.
And, of course, since I was curious about how much money that might be, I found on Wikipedia (therefore, it must be true!) that Franklin had bequeathed about 1000 pounds (about $4400) each to Philadelphia and Boston:
As of 1990, more than $2,000,000 had accumulated in Franklin's Philadelphia trust, which had loaned the money to local residents. From 1940 to 1990, the money was used mostly for mortgage loans. When the trust came due, Philadelphia decided to spend it on scholarships for local high school students.
I searched "compound interest calculator" and using the first one I found, plugged in $4400 for 215 years at a 10% rate compounded annually. That gives us a grand total of:
$3,490,438,461,210.14
That's nearly $3.5 trillion.
Pretty sure we could cover that pension fund imbalance... and pave Market Street with gold.
Just something to think about.
Comments (1)
Want Some More To Think About :-)
The Urban League Of Philadephia's 2007 State Of Black Philadelphia Report paints a grim picture on the issue of race , inequality , poverty and sociology " lol ".
Posted by Jasper Zeigler Jr | December 7, 2007 2:22 PM