Problems With Constant Compound Interest

This is a continuation of an irregular series which you can find here. Maybe if I were more scientific, I would have called it “All Exponential Growth Processes Run Into Constraints and Threats,” or if I were more poetic, “Nothing Lasts Forever — Nothing Grows to the Sky.” Regardless, simple modeling is the bane of long-duration financial calculations. I remember talking with some friends who served on a charitable board with me about some investment grade long bonds (11-30 years) that I had purchased for a life insurance client that yielded 7-9% in late 1999. They said to me that it was foolish to lock up money for so long in bonds when you could earn so much...

Source:
http://article.wn.com/view/2011/02/23/Problems_With_Constant_Compound_Interest/

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