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Crash Maths...

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Now, I know many of you could do this with a calculator, or could post the calculation that gives you the answer, however, I am interested in finger-in-the-air intuitive guesses to the answer to this question...

If a house falls in price by 1% per month for 100 consecutive months, by what percentage has it fallen overall at the end of this period?

(remember, no calculator, just give me your gut-feeling answer, e.g. "about x%")

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Now, I know many of you could do this with a calculator, or could post the calculation that gives you the answer, however, I am interested in finger-in-the-air intuitive guesses to the answer to this question...

If a house falls in price by 1% per month for 100 consecutive months, by what percentage has it fallen overall at the end of this period?

(remember, no calculator, just give me your gut-feeling answer, e.g. "about x%")

In my head I can see that in the early months you are losing pretty close to the full 1% of the original total.

Even if you fall to the price of half of the original total, you are still losing 50%.

So I am saying that the reduction over the full period will be 60 - 70%, ie it will be around 35% of the original price.

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Now, I know many of you could do this with a calculator, or could post the calculation that gives you the answer, however, I am interested in finger-in-the-air intuitive guesses to the answer to this question...

If a house falls in price by 1% per month for 100 consecutive months, by what percentage has it fallen overall at the end of this period?

(remember, no calculator, just give me your gut-feeling answer, e.g. "about x%")

I'm going to guess your points are:

1) Few people have an accurate intuitive understanding of the exponential function.

2) It won't take huge monthly changes for house prices to drop significantly with time.

However, with your 100 month timescale = 8.333 years, lets say inflation (realworld, not all the gubmint fudges) is around 5% for that period. That's 1.05 to the power of 8.333 = a 50% increase in prices. (Sorry, not convinced by the deflation argument so far).

So isn't there a risk that inflation will counteract house price falls - even if not directly and we still see real reductions in house prices, without wage inflation (not looking likely) we are all going to be so much worse off.

Thoughts?

Edited by pyracantha

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Now, I know many of you could do this with a calculator, or could post the calculation that gives you the answer, however, I am interested in finger-in-the-air intuitive guesses to the answer to this question...

If a house falls in price by 1% per month for 100 consecutive months, by what percentage has it fallen overall at the end of this period?

(remember, no calculator, just give me your gut-feeling answer, e.g. "about x%")

1/e

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Now, I know many of you could do this with a calculator, or could post the calculation that gives you the answer, however, I am interested in finger-in-the-air intuitive guesses to the answer to this question...

If a house falls in price by 1% per month for 100 consecutive months, by what percentage has it fallen overall at the end of this period?

(remember, no calculator, just give me your gut-feeling answer, e.g. "about x%")

my guess is around 40%-45%

Edited by richyc

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As we're having fun here, here's another one - again no calulators.

A jar starts out with a small amount of water in it.

The volume of water in the jar doubles every second.

After 1 minute the jar is 100% full.

How full is it after 30 seconds?

How full is it after 59 seconds?

Remember no calculators - guesses only.

Edit: This is relevant to HPC because my house has a leak and it's value is decreasing in proportion to the above.

Edited by WiseBear

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As we're having fun here, here's another one - again no calulators.

A jar starts out with a small amount of water in it.

The volume of water in the jar doubles every second.

After 1 minute the jar is 100% full.

How full is it after 30 seconds?

How full is it after 59 seconds?

Remember no calculators - guesses only.

30 seconds - feck all.

59 seconds, half full.

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As we're having fun here, here's another one - again no calulators.

A jar starts out with a small amount of water in it.

The volume of water in the jar doubles every second.

After 1 minute the jar is 100% full.

How full is it after 30 seconds?

How full is it after 59 seconds?

Remember no calculators - guesses only.

Edit: This is relevant to HPC because my house has a leak and it's value is decreasing in proportion to the above.

After 30 seconds it must be 1 / 2 (to the power 30) full.

That is pretty close to zero.

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As we're having fun here, here's another one - again no calulators.

A jar starts out with a small amount of water in it.

The volume of water in the jar doubles every second.

After 1 minute the jar is 100% full.

How full is it after 30 seconds?

How full is it after 59 seconds?

Remember no calculators - guesses only.

Edit: This is relevant to HPC because my house has a leak and it's value is decreasing in proportion to the above.

As long as the leak is in the vegetable patch, this isnt a problem.

Mind you, a leek in your piping is a problem.

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As we're having fun here, here's another one - again no calulators.

A jar starts out with a small amount of water in it.

The volume of water in the jar doubles every second.

After 1 minute the jar is 100% full.

How full is it after 30 seconds?

How full is it after 59 seconds?

Remember no calculators - guesses only.

Sounds like one of the maths homework problems I was tormented with at school. (often marked with added comment, 'Did your father help you with this again? See me.)

But then it did take me two goes to get my maths O level.

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Come on, keep on topic. I've made it relevant for you:

As we're having fun here, here's another one - again no calulators.

A jar wheelbarrow starts out with a small amount of water money in it.

The volume amount of water money in the jar wheelbarrow doubles every second.

After 1 minute the jar wheelbarrow is 100% full.

How full much money is in it after 30 seconds?

How full much money is in it after 59 seconds?

Remember no calculators - guesses only.

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Actuaaly, it's maybe more like this:

A wheelbarrow starts out full of money.

The value of the money in the wheelbarrow halves every day.

How much is the money worth after 30 days?

How much is the money worth after 1 year?

Remember no calculators - guesses only.

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Actuaaly, it's maybe more like this:

A wheelbarrow starts out full of money.

The value of the money in the wheelbarrow halves every day.

How much is the money worth after 30 days?

How much is the money worth after 1 year?

Remember no calculators - guesses only.

30 days - roughly a billionth.

1 year - (very) roughly a billionth of a billionth of a billionth of a billionth of a billionth of a billionth of a billionth of a billionth of a billionth of a billionth of a billionth of a billionth.

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30 seconds - feck all.

59 seconds, half full.

Ok, first answer was spot on.

Actually this example highlights an important point:

When we have a geometric progress the end can be much closer than you think.

After 59 out 60 secs we are still only half full.

When applied this to the planets resources, or increasing debt those that say that there isn't a probelm still think the old ponzi system can go on for another 20 years - it can't - we are much closer to the end than you think.

And for the person worried about my leak:

As long as the leak is in the vegetable patch, this isnt a problem.

Mind you, a leek in your piping is a problem.

I actually have a leak stuck in the pipe to slow the leek down.

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Right, now a variation:

A vase starts off empty. After 6 months it's full of twigs. The number of twigs is doubled every time the estate agent calls.

How much is the house worth at first, after 3 months, and after 5 month 25 days?

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Right, now a variation:

A vase starts off empty. After 6 months it's full of twigs. The number of twigs is doubled every time the estate agent calls.

How much is the house worth at first, after 3 months, and after 5 month 25 days?

Infinity ∞

Because house prices only ever go up.

Edited by darwin

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As we're having fun here, here's another one - again no calulators.

A jar starts out with a small amount of water in it.

The volume of water in the jar doubles every second.

After 1 minute the jar is 100% full.

How full is it after 30 seconds?

How full is it after 59 seconds?

Remember no calculators - guesses only.

Edit: This is relevant to HPC because my house has a leak and it's value is decreasing in proportion to the above.

This is just the reverse of putting one grain of sand on the first square of a chess board and if you double up as you move from square to square, how many gains of sand do you have to put on the 64th square?

And the answer is "there aren't enough grains of sand in the whole world to complete this test"!

tim

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When we have a geometric progress the end can be much closer than you think.

An additional question...

If we say 90 seconds instead of 60 in the original question, what are the two answers (i.e. the volume filled at 45 seconds and 89 seconds) ?

And what now is the problem with the question ???

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  • 312 Brexit, House prices and Summer 2020

    1. 1. Including the effects Brexit, where do you think average UK house prices will be relative to now in June 2020?


      • down 5% +
      • down 2.5%
      • Even
      • up 2.5%
      • up 5%



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