compound math

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Michael30000

Senior Member
Russian
Hello everyone,

One of the chapters (dedicated to ecological problems) in the book Thank You for Being Late by Thomas Friedman begins as follows:

We are wickedly bad at dealing with the implications of compound math.Jeremy Grantham, investor

What is compound math? Is it some kind of mathematics? Or does it imply difficult/complex math problems?

Thank you.
 
  • dojibear

    Senior Member
    English - Northeast US
    This probably means "the mathematics of compound interest". I remember buying a calculator back in the 1970s (before we all had computers) that had several buttons for doing interest calculations. Doing it by hand is difficult.

    For example, your interest is 7 per cent per year. But your payments are monthly, so the principle amount changes every month. This continues for 30 years (360 payments). How much interest will you pay, over 360 payments? What percent of the 3d payment is interest? What percent of the 240th payment is interest?

    Before there were calculators, every banker and real estate broker had written tables showing the answers for various common loans (30 years, 15 year) at various interest rates.
     
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