If you were to start with one penny and double it every day for 30 days, you would end up with £10,737,418.24 on the 30th day. This can be worked out quite easily on a calculator by inputting 0.01 and doubling it 30 times.
If I started with a penny and doubled it every day, how long would it take to reach £1 million?
If you started with a penny and doubled it every day, it would take 27 days to reach £1 million. On the 26th day, you would have £671,088.64, and on the 27th day, you would have £1,342,177.28, which is over £1 million.
Has anyone ever done this?
While it’s unlikely that anyone has actually doubled a penny every day for 30 days or more, this concept is often used to illustrate the power of compounding. In reality, it would be almost impossible to have a 100% return on an investment every day for 30 days consecutively. There are just too many factors that can affect the rate of return on investments, and being that consistent would be considered impossible. However, the principle of compounding can still be a powerful tool for growing wealth over time.
What is the mathematical equation for this process?
The mathematical equation for calculating the amount of money you would have after doubling a starting amount every day for a certain number of days is:
A = P x 2(to the power of n)
Where:
A is the amount of money you have at the end of the period
P is the amount of money you had at the start
n is the number of days you doubled your starting amount
So, as in the above example, if you started with £0.01 (=1p) and doubled it every day for 30 days, the equation would be:
A = £0.01 x 2 (to the power of 30) = £10,737,418.24
This means that if you started with £0.01 and doubled it every day for 30 days, you would end up with over £10 million at the end of the period.
