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by Bsharp
4594 days ago
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Unrealistic results are an indicator that something might be wrong with the model design or model choice which deserves investigating. Why is that such a bad thing? If you're modeling investment growth and your model is: future_value = investment_amt * (interest_rate ^ num_years)
or future_value = investment_amt * (1 + (interest_rate * num_years))
you might realize after running it a few times and seeing incorrect results that the model is flawed (first case) or inappropriate (second case) and fix it to: future_value = investment_amt * ((1 + interest_rate) ^ num_years)
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