An Economist Watches "Mary Poppins Returns"

This is why economists are no fun at childrens’ movies.

Near the end of “Mary Poppins Returns,” Mr. Dawes Jr. tells Michael Banks that the tuppence he invested with the bank 20 years ago has grown so that it’s now sufficient to pay off his loan to the bank.  And while we are not told exactly how much Michael owes the bank, we do know that it’s at least £100.  And so I’m sitting in the theater thinking to myself…Is that possible?  And when I got home, I worked it out.  (Of course, I did have to deal with the unlikelihood that Michael had three kids, a couple of whom appeared to be about 10 years old, and George would presumably be about 25…)

£100 is 24,000 pence (100x240).  So what rate of interest would the bank have to be paying on savings deposits in order for tuppence to grow to 24,000 pence in 20 years (and here I will assume a single annual interest payment)?  And the answer is:  160% per year.  Right. 

How long would it take for tuppence to grow to £100 if the bank pays 6% interest?
About 295 years.  (After 20 years, he’d have about six pence ha’penny.)

Either way Mikey Banks is still screwed.

Unless, of course, Mr. Dawes Jr. is just lying to Michael, and kicking in £100 so we can have a happy ending…