A Million Dollars or a Thousand Dollars Every Week

Would we rather have one million dollars or receive a thousand dollars every week?

Let's think about that for a minute.

How long will it take for $1,000 per week to add up to more than$1,000,000?

How to Calculate the Value One Thousand Dollars Per Week Over Time

Calculating by weeks is easy, simply multiply the number of weeks by 1,000. However, we usually think in terms of years, not weeks.

There are 52 weeks in a year, so we multiply 52 by 1,000, then by the number_of_years.

Here's an example implementation in JavaScript:


function calcAmountForYears(number_of_years) {
   // 52 weeks in each year
    return 1000 * 52 * number_of_years;
}
}

What About Taxes

In the real world we must consider taxes, which vary over time and by region, but they play an important role in our decision.

For example, in the United States the tax bill on a one-time sum of 1,000,000 dollars would be significant in any State, but in some States, half could be taken.

On the other hand, if we take $52,000 every year, our tax bill would be reduced greatly.

What About Investing

Whether we take the $1,000,000 or $1,000 per week, we will grow our money over the long run by investing. If we invest our $1,000,000 (or what is left after taxes) we can expect it to double every 7 years.

We must understand the power of compound interest to manage our money wisely.

Similar Idea

We explore a similar idea, but instead of $1,000 dollars a week, we use a penny that double every day .

Let's think about why the penny grows so much faster than our $1,000 a week.

It's because of the rate-of-growth. $1,000 a week is linear growth, while doubling every day is exponential growth.

Conclusion