I have a question regarding an example in The Richest Man in Babylon by George Clason.
Here is the context:
"I do know a sandal maker, named Ansan, who explained to me not long ago that each week for eight years he had deposited with his money lender two pieces of silver. The money lender had but recently given him an accounting over which he greatly rejoiced. The total of his small deposits with their rental at the customary rate of one fourth their due for each four years, had now become a thousand and forty pieces of silver.
"I did gladly encourage him... that in twelve years more, if he would keep his regular deposits of but two pieces of silver each week, the money lender would then owe him four thousand pieces of silver..." (Clason, 39-40, emphasis added)
How did he get to 4,000 pieces of silver? I was able to calculate the 1,040 pieces of silver but have a hard time getting to the 4,000 number. Is there a formula for this? Is this compound interest? Please help. Thank you.
The book says twelve years more which would be a total of twenty years, the math checks out
@Aaron K. Can you show me how you did the math?
@Daniel Kim one fourth their due for each four years = an annual return of .25/4 or about 6.25%
then just plug that into a retirement calculator that calculates contributions and compound interest for 20 years