I'm curious if anyone has run the numbers and looked at what the interest payments of this bond over the past 400 years would have amounted to had they been invested in some theoretical basket of typical assets that were available at the time.
It sounds like a pittance now but 400 years of a compounding pittance could be a lot of money.
Edit: with an annual contribution of €13.61 and a real rate of return of 3%, 400 years of annual compounding would be over €7 million. With a rate of 4% it would be €280 million.
> with an annual contribution of €13.61 and a real rate of return of 3%, 400 years of annual compounding would be over €7 million. With a rate of 4% it would be €280 million
400 years -> 280M
That gives you a perspective on how insane a billion dollars is. Also wild that any single individual can own that much (and some a lot more!)
> Also wild that any single individual can own that much (and some a lot more!)
Nobody owns a billion dollars except governments.
"Billionaires" usually have ownership of business interests that could theoretically be sold for a billion dollars, but that they generally do not want to sell (because they would rather own and often run the business.).
LOL Bezos sold a few Bs of Amazon every other week recently. I’m sure all the top billionaires could get a billion in cash easily if they ever need to.
The issue would be finding an asset (or group of assets) that 1) held value and 2) you could maintain ownership over continuously for 400 years. Cities, kingdoms, countries, currencies, corporations, banks, markets all rise and go extinct over much shorter periods.
Monetary calculations in general are tough over that long of a timespan in general much less when you have to factor in the likelihood your theoretical investment would have survived the bakers dozen of financial/governmental crises.
> with an annual contribution of €13.61 and a real rate of return of 3%, 400 years of annual compounding would be over €7 million. With a rate of 4% it would be €280 million.
Calculating the total return given an annual average rate of return is the easy part here. The idea that you can easily invest in a diversified basket of assets and receive a fairly safe x% a year is a relatively recent one. I'm not sure what assets you could invest in 400 years that would even be guaranteed to exist today.
> with an annual contribution of €13.61 and a real rate of return of 3%, 400 years of annual compounding would be over €7 million. With a rate of 4% it would be €280 million.
Reminds of Futurama with billionaire Philip J Fry after unintentionally leaving 93 cents in the bank for 1000 years.
Clearly not, since all the answers were incorrect; two of them by an order of magnitude:
* 0.93((1.03)^1000) is 6.393E12, not 1.788E13
* 0.93((1.02)^1000) is 3.7E8, not 4.28E9
* 0.93*((1.01)^1000) is 19,492, not 19,482
...on a whim, I just tried asking ChatGPT "What would 93 cents accumulate to over 1000 years with 3% compound interest?", and the answer (179.74) was staggeringly wrong because it thought that 1.03^1000 was approximately 193.48.
Personally, I can say that I just gained a whole _ton_ of respect for you for your ability to learn a lesson, to admit that you made a mistake, and not to double-down on insistence that LLMs are Good, Actually.
I hope my message didn't come across at too unpleasantly confrontational - I'm not annoyed at _you_, but rather at the over-reliance of these hallucination machines in our industry which is supposed to prize hard data and accuracy. I'm glad I was able to help someone gain a bit of reasonable skepticism for them!
All the very best to you and yours for this holiday season!
It sounds like a pittance now but 400 years of a compounding pittance could be a lot of money.
Edit: with an annual contribution of €13.61 and a real rate of return of 3%, 400 years of annual compounding would be over €7 million. With a rate of 4% it would be €280 million.