What Is The Correct Answer?

[kaljen]

Mr Dupont invests $100 and gets 100% profit/month. After 6 months, he gets 600%. The $100 gets doubled every month so it's $6400 after 6 months while if it's 600%, he gets $600. Which one is correct if he doesn't withdraw during 6 months? How much does he get after 6 months?

[kaljen]

Guys, this is a math problem. No one is really investing anything here. Please, help me.

[kaljen]

I see. I saw education and I thought it was for homeworks like on some QA sites. Parents can help children with their homeworks by explaining to them. You could have at least explained something to me. I'm here for help, not necessarily looking for an exact answer. You could have explained the difference between something doubled and a percentage. So I can figure out the answer by myself. But I guess my math problem is not important to you because you are not at school anymore and no one is investing. Sorry for not being british. Bye.

[Mamyalynne]

We don't reject non British members kaljen, sorry you didn't het a good first impression of us.

Look back through your coursework and hopefully something you have done already may help you find the formula you need to work this out.

I am hopeless with Maths,, sorry I can't help.

[sanmac]

Actually, Kaljen, I'm not British either. My comment was sort of an observation on the variation of spelling. Don't leave...You might get an intelligent answer to your question.

[Mamyalynne]

* get not het, sorry.

[Jackdaw33]

Unless someone wants to prove me wrong I would say the correct answer is $6,400. His money doubles each month so after 6 months he has $100 x 2^6 = $6,400

[JJ109]

The answer will depend upon whether the interest is compounded or not.

If it is not compounded then the capital $100 is accruing interest at the rate of $100 per month - total to come at the end of 6 months = $600 interest = 600%

If it is compounded then after 1 month $100 interest is capitalised so that the capital is $200 which is then invested and therefore earns $200 next month. After 6 months there will be $6400

Therefore both answers could be correct depending upon whether the interest is compounded or not.

[THECORBYLOON]

If it's compound interest, you earn interest on the whole amount including any interest already earnt and end up with $6,400.

If it's simple interest, interest is paid only on the initial amount and you would get $600.

Without more information, both answers are possible.

[Jackdaw33]

Yes, I automatically assumed compound interest when you said if he doesn't make a withdrawal.

[JJ109]

In my opinion, this question is wanting you to explain the difference between "simple" interest (600%) = $600 interest + $100 original investment = $700 returned and "compound" interest ($6300 interest +$100 original investment = $6400 returned)

[Jackdaw33]

Actually it would be $700, $600 interest plus $100 principal.

[Canary42]

Your question is a little unclear, your first two sentences define two totally different interest rates/methods. Then it depends on how the interest is calculated by the lender. I also assume you mean compound interest.

If it is calculated as compound interest on a monthly basis then you are correct in saying it doubles every month and he will have $6,400.

But if it is calculated on a six-monthly basis at 600% per half-year then he will get $600.

(Compound interest can be calculated daily(rare), monthly, half-yearly, yearly, etc. - it all depends on the stated investment terms)

[ABSpareEditor]

If existing members can't show courtesy towards new members then they will find themselves suspended.

No one had to comment on this thread. If you have nothing helpful to add maybe it would be best if you didn't add anything at all.

[jim360]

Another pair of answers might be that he would get either $100+$200+$300+$400+$500+$600 (based on increasing % return on the initial investment, and the idea that in the sixth month he gets a %600 percent return on the investment at the start of the month), = $2200 total (including the initial $100). Or you'd get 100*2*3*4*5*6*7 = $504,000 (similar idea, but compounded).

The question seems very ambiguously worded! The most likely answer based on usual ideas of high-school maths is $6400, but I'd want to see the original question and context in full.