My 8-year-old daughter recently reminded me of a math riddle I remember from when I was a kid: "Would you rather have a million dollars right now, or one penny doubled every day for 30 days?" The answer seems pretty obvious at first blush--take the million bucks! Who wants a pile of pennies in a month?
But the math behind the penny doubling is surprising and kind of fun. On day 1 you have one penny; on day 2 you have two pennies. By day 10 you have a little over five bucks. (Is that million-dollar deal still on the table, or is it too late?) By day 20 you have around $5,000; by day 25 you have over $150,000. On the 30th day you have--wait for it--over $5 million.
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Karen Wallace does not own shares in any of the securities mentioned above. Find out about Morningstar’s editorial policies.