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Seinfeld Economics: The Kiss Hello

by Linda Ghent

Compound interest involves adding accumulated interest back to the principal, so that interest is earned on interest from that moment on.

Future value measures how much an amount of money will be worth once compound interest has been added.

Present value is the value on a given date of a future payment or series of future payments, discounted to reflect the time value of money.

 

Seinfeld: The Kiss Hello

Fifty-three years ago, Jerry's Uncle Leo stiffed Jerry's mother out of $50. Eager to get it back, Jerry's father says, “Do you know what that's worth today in interest alone? $663.45, figured at a conservative 5% interest, compounded quarterly.” Morty's calculations are almost accurate, though he does not compound quarterly, and his sum includes the principle, not just the interest.

from Seinfeld, Season 6 (1995)
Creator: Larry David & Jerry Seinfeld
Posted by Linda Ghent
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