So a few weeks ago I gave you this offer:
The effective annual interest rate is 4%. You pay me $300 today and I will pay you $0.50 a day forever - you'll make your money back in two years!
I told you I wouldn't do it, but I was wrong. Way wrong in fact - were talking trillions in 20 years...
So... I've got a new scheme for you and I'm pretty sure I'm not wrong on this one. I'll leave this one open ended and you can leave your opinion in the form of a comment.
Yes or No? - You pay me $2,000 today, and I'll pay you $50 three times a year until you die. The interest rate is 2.45%. You expect to live at least 30 more years.
Hint: find the atomic number of nickle. At this number of years the two plans are equal (the interest rate was choosen for such an outcome).
Monday, February 22, 2010
Sunday, February 21, 2010
Week 4
Week 4 was a week of 4 exams. Hopefully that phoneomenon doesn't occur in the comming weeks (7 exams in week 7?!?). What with all those exams, the amount of new material covered was pretty limited (though that seems to be a reoccuring trend in these little entries)...
Calc III: we drew more pretty pictures... and still no real Calculus! My soul panneth for a double integral!
English: we are doing a research project for the rest of the semester, and are currently selecting our topics. I'm leaning twords Vatican II.
Interest Theory: nothing new. The class got murdered by a difficult test: my 83% was the 3rd highest score in the class. Our professor appologized profusely, saying that he lost a fair amount of sleep after he saw how poorly we did (he was scared we'd all drop out of the class. Nobody did). After steping away from the monster test I got a bit of a better grip on it. Here was one problem:
[insert politically correct name here] takes out a $100 loan from PayDay Loans and pays $115 in 2 weeks. If the $15 is understood to be interest convertible daily, how long would it take for a $100 loan to grow to $500,000 at that interest rate.
The answer: 853 days (about 2 years and 3 months)
The moral: stay away from PayDay Loans
Economics: *yawn*... *snooze*... -- those are the typical sounds heard in class. It's not that the material is boring (it's really intersting!), but it's being govered ssssoooo sssslllllooooowwwwwlllllyyyyy!
Accounting: were getting into managerial accounting, which deals with helping big wigs in buisness make decisions. To that end, we learned how to classify production costs...
Calc III: we drew more pretty pictures... and still no real Calculus! My soul panneth for a double integral!
English: we are doing a research project for the rest of the semester, and are currently selecting our topics. I'm leaning twords Vatican II.
Interest Theory: nothing new. The class got murdered by a difficult test: my 83% was the 3rd highest score in the class. Our professor appologized profusely, saying that he lost a fair amount of sleep after he saw how poorly we did (he was scared we'd all drop out of the class. Nobody did). After steping away from the monster test I got a bit of a better grip on it. Here was one problem:
[insert politically correct name here] takes out a $100 loan from PayDay Loans and pays $115 in 2 weeks. If the $15 is understood to be interest convertible daily, how long would it take for a $100 loan to grow to $500,000 at that interest rate.
The answer: 853 days (about 2 years and 3 months)
The moral: stay away from PayDay Loans
Economics: *yawn*... *snooze*... -- those are the typical sounds heard in class. It's not that the material is boring (it's really intersting!), but it's being govered ssssoooo sssslllllooooowwwwwlllllyyyyy!
Accounting: were getting into managerial accounting, which deals with helping big wigs in buisness make decisions. To that end, we learned how to classify production costs...
Saturday, February 13, 2010
What I Learned - Week 3
You didn't miss much last week: it was boring! But this week is particularily interesting!
This is the graph of the vector-valued function r(x)={cos(5x),sin(x),sin(6x)}.
In literature I wrote an essay about Nietzsche (famous for saying "God is dead", among other witty aphorisms), Aristotle (famous for saying "By nature, all men desire to know"), and the Catholic Church (popular culture doesn't seem to care what they say...) and the agreement between the three. You can see the difficulty: you got an atheist, a pagan who was philosopically very Christian, and the Church. You can read it here!
Interest theory is by far the coolest. We have been working with annuities, which is a fancy word for repeated payments. Would you take this deal (I would'nt!):
And economics is boring. The subject is wildly interest, but the monotonous pace that it is taught at is as obnoxious as the immature freshman who occupy the class' seats... we have been talking about supply and demand for a week and a half now. I figured that was common sense.
And accounting really is boring, the subject that is. I'll spare you the gorey details, but this week we learned about various ratios to analyze a company's position in the short and long-term.
It seems that Calculus III is Calc I and II in 3d, which makes for some cool pictures, and even more so makes me extremely thankful for computers! Imagine doing this by hand (you can see by the angled edges that the computer even had some troubles!):
This is the graph of the vector-valued function r(x)={cos(5x),sin(x),sin(6x)}.In literature I wrote an essay about Nietzsche (famous for saying "God is dead", among other witty aphorisms), Aristotle (famous for saying "By nature, all men desire to know"), and the Catholic Church (popular culture doesn't seem to care what they say...) and the agreement between the three. You can see the difficulty: you got an atheist, a pagan who was philosopically very Christian, and the Church. You can read it here!
Interest theory is by far the coolest. We have been working with annuities, which is a fancy word for repeated payments. Would you take this deal (I would'nt!):
The effective annual interest rate is 4%. You pay me $300 today
and I will pay you $0.50 a day forever - you'll make your money back in two years!
And economics is boring. The subject is wildly interest, but the monotonous pace that it is taught at is as obnoxious as the immature freshman who occupy the class' seats... we have been talking about supply and demand for a week and a half now. I figured that was common sense.
And accounting really is boring, the subject that is. I'll spare you the gorey details, but this week we learned about various ratios to analyze a company's position in the short and long-term.
Tuesday, February 9, 2010
An Email from my RA
Our floor kinda stinks...
Hey Guys,
I don't know if you noticed, but our floor hasn't smelled the greatest lately. So...with that being said, I have a few suggestions that could help remedy that problem:
-Shower on a regular basis.-Don't let your dirty laundry sit around too long. If you still don't know how to use the washing machines downstairs, I would be happy to teach you.
-Throw away old food, especially if it's moldy or rotting. It doesn't hurt to clean out your fridge once in a while. You never know what you might find.
-Keep your door open. Our wing is pretty good about keeping the doors open, but let's make sure we keep that up.
-Open your windows once in a while. I know it's cold, but opening your window wide for ten minutes helps. Or opening your window slightly for an extended period of time helps, too.
-Don't keep garbage in your room that smells bad. Put it in the garbage chute by the drinking fountain.
-Flush the toilets after each assault on porcelain bay.
Now, I'm not saying you guys aren't doing these things. And I'm not even saying that it's our wing that's the problem. BUT, in all fairness, I just think it's best to send these reminders out to everyone. I hope your week is off to a good start. Any questions, comments, or concerns let me know.
David
Hey Guys,
I don't know if you noticed, but our floor hasn't smelled the greatest lately. So...with that being said, I have a few suggestions that could help remedy that problem:
-Shower on a regular basis.-Don't let your dirty laundry sit around too long. If you still don't know how to use the washing machines downstairs, I would be happy to teach you.
-Throw away old food, especially if it's moldy or rotting. It doesn't hurt to clean out your fridge once in a while. You never know what you might find.
-Keep your door open. Our wing is pretty good about keeping the doors open, but let's make sure we keep that up.
-Open your windows once in a while. I know it's cold, but opening your window wide for ten minutes helps. Or opening your window slightly for an extended period of time helps, too.
-Don't keep garbage in your room that smells bad. Put it in the garbage chute by the drinking fountain.
-Flush the toilets after each assault on porcelain bay.
Now, I'm not saying you guys aren't doing these things. And I'm not even saying that it's our wing that's the problem. BUT, in all fairness, I just think it's best to send these reminders out to everyone. I hope your week is off to a good start. Any questions, comments, or concerns let me know.
David
Saturday, February 6, 2010
Roommates
Nick was eating shredded squid that he brought back from China today. He offered me some an I politely declined...
We also moved his desk today. He decided to bunk his bed earlier this week, but his desk covered up the ladder, so he was climbing on furniture to get into bed, almost always kicking something off as he did. I asked him why he didn't move his desk several times, and eventually (he's far too nice) he said that he didn't want to move it because then his light would be right next to me and he'd keep me up. I assured him that I don't think it will be a problem, and that if it is I will simply turn the other direction.
The other night I came back from a friends room and he asked if I was talking about God (he's noticed that I really like to do that), and I said I did. And he said "why don't you talk about girls sometime", and I said that we did, on account of it being the feast day of St. Agatha. Today I was singing a hymn because I was in one of those moods where you have absolutely no reason to be frustrated but you are, and acting on your foolish feelings only leads you into them being actualized. And Nick asked me if I was happy about a girl. I told him I didn't care about girls and he repeated my styalized "girls" at least 5 times.
We also moved his desk today. He decided to bunk his bed earlier this week, but his desk covered up the ladder, so he was climbing on furniture to get into bed, almost always kicking something off as he did. I asked him why he didn't move his desk several times, and eventually (he's far too nice) he said that he didn't want to move it because then his light would be right next to me and he'd keep me up. I assured him that I don't think it will be a problem, and that if it is I will simply turn the other direction.
The other night I came back from a friends room and he asked if I was talking about God (he's noticed that I really like to do that), and I said I did. And he said "why don't you talk about girls sometime", and I said that we did, on account of it being the feast day of St. Agatha. Today I was singing a hymn because I was in one of those moods where you have absolutely no reason to be frustrated but you are, and acting on your foolish feelings only leads you into them being actualized. And Nick asked me if I was happy about a girl. I told him I didn't care about girls and he repeated my styalized "girls" at least 5 times.
Tuesday, February 2, 2010
Exam Number 2
In the future a common theme for this blog will be the 9 exams one must take to become a certified actuary. I am currently preparing for number 2 (I haven't taken 1 yet - that's for next year). The second exam is about interest and introductory financial math (i.e. really weird schemes to try to make money... like derivities, and swaps, and who knows what else!).
My professor has supplied my class with 5 past exams. Now, in 2003 they changed the exam so many of the questions are unaplicable, but it is all still quite helpful. Like a true student actuary I made an excel table which has a box for me to check when I successfully answer each question, and also a little formula which calculates how many I've done. Right now I'm 2% way through, after answering 4 questions correctly. I don't know how to do the other 98% yet, but I still have 11.5 weeks of class left... My favorite one so far:
Mike receives cash flows of 100 today, 200 in one year, and 100 in two years. The
present value of these cash flows is 364.46 at an annual effective rate of interest i.
Calculate i.
The answer is about 13%.
A short side comment: it's interesting to note the names the exam uses: Mike, Bruce, Robbie. Not these PC names I'm used to seeing in text books. The world became a considerably weirder place when text books decided it was neccessary to have a Jamal and Carlos in every problem. I digress...
My professor has supplied my class with 5 past exams. Now, in 2003 they changed the exam so many of the questions are unaplicable, but it is all still quite helpful. Like a true student actuary I made an excel table which has a box for me to check when I successfully answer each question, and also a little formula which calculates how many I've done. Right now I'm 2% way through, after answering 4 questions correctly. I don't know how to do the other 98% yet, but I still have 11.5 weeks of class left... My favorite one so far:
Mike receives cash flows of 100 today, 200 in one year, and 100 in two years. The
present value of these cash flows is 364.46 at an annual effective rate of interest i.
Calculate i.
The answer is about 13%.
A short side comment: it's interesting to note the names the exam uses: Mike, Bruce, Robbie. Not these PC names I'm used to seeing in text books. The world became a considerably weirder place when text books decided it was neccessary to have a Jamal and Carlos in every problem. I digress...
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