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INVESTING BY THE NUMBERS

HaloulakosDr. V. E. “Bill” Haloulakos
Aerospace Science Consultant/Professor
AIAA National Distinguished Lecturer and Legacy Member
Distinguished Engineering Educator Award Winner
E-mail: imveh@sbcglobal.net

 When we invest money we are always playing a numbers game.

  • The amount invested is a number
  • The interest rate is a number
  • The period of investment is a number
  • The final value of the total amount accrued is a number
  • The number of compounding periods in a year is also a number

We then feel justified to raise the question as to exactly WHAT IS A NUMBER?

We shall discuss the concept of numbers and also lay out the peculiar behavior of two special numbers, namely ZERO and INFINITY, and also show how INFINITY plays a special role in an interesting investment problem.

When we need to talk about the numbers one, two, etc, we usually show the corresponding number of fingers or we point to a corresponding number of material items. But in the number system there are two very special numbers with rather elusive behavior. They are the numbers of ZERO and INFINITY. When we need to talk about zero all we can do is make a circle with our thumb and the index finger. There’s no other way to indicate the idea or concept of nothing, which the number zero indicates. On the other end of the numerical spectrum lies infinity which is impossible to describe in a simple understandable manner. All we can say is that it is BIG, very BIG. Actually exactly as say that infinity is something very BIG we can also say that zero is something very small. How BIG and how SMALL is only understood by crossing over into the fields of Physics and finance, which we shall do below.

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