Saturday, May 10, 2014

Compound Interest, Die Hard and Hans Gruber

Die Hard is a spectacularly entertaining movie and can be used as a lesson in compound interest.

Spoilers follow.

The villain, Hans Gruber, played marvelously by Alan Rickman, attempts to steal $600 million dollars and plans his escape so that he can retire to an island and earn 20%.

Now, even in those days, earning 20% wasn't easy, and it seems less likely now.  But, taking him at his word, he was very smart financially.  His plans are something everybody can sensibly aspire to.

The movie was made in 1988.  If he had been able to accomplish the two things:

1. Steal $600 million
2. Earn 20%

and hadn't had to touch the money,

he would, through the magic of compound interest, now have a fortune worth


That's $57 billion and change, which would make him 5th on Forbes' list of world's richest people

Not bad. .

No comments:

Post a Comment