Double Compounding in 10-YR OpSt Parking Income and Other Income

[Anonymous]

Hi Spencer,

I noticed that in the 10-YR OpSt, your formula for years 2-10 for Parking Income and Other Income: =F14*(1+$E14)^(G$4-1), is raised to the period – 1 power.

I am confused because if you are multiplying each previous period by 1 + the growth rate, doesn’t that already include compounding?

Why are you compounding again? Aren’t you compounding twice?

Thank you!

[Spencer Burton]

Wesley – you are absolutely correct. That is an error. I’ll make the change in the source file and make note in the video so others don’t do the same.

Thankfully the case assumed no other income, or I’d have to update the results as well!

Thank you for spotting this and pointing it out.

Spencer

[Anonymous]

Oh okay awesome, sounds good.

Thanks!

Wes

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