And we wonder why the country's in trouble

What's your financial IQ?

Before you answer that question, consider the report that ran last night on the local news about a woman's tribulations in recovering $3,700.00 that's been in the unclaimed money fund since 1986 or 1987.

Apparently the woman moved and got married, and the bank now long since merged with Wells Fargo had sent the money to an expired address.  The Texas Comptroller of Public Accounts, now in possession of the funds, denied the woman's claim to the money, stating that she couldn't adequately prove she was the original owner.  And so the woman contacted the TV news.

What was interesting to me was that a Wells Fargo spokesman told the reporter that the woman's $3700.00 invested at 3.00% annually, would now be worth $2.5 million!  That's like Charlie Sheen money!   And the TV news duly reported that.

Really!?

Now, I'm no Peter Lynch, Milton Friedman, Ben Stein, Dale Rogers, or even Jarhead, but without my handy-dandy HP12C calculator I seem to remember the old 'rule of 72'.  For the lay-persons out there, the rule of 72 says that if you divide the annual interest rate of an account into 72, the result is the number of years it will take to double your money. 

So, if the woman had her $3700.00 in a CD at 3.00%, it would double in 24 years.  Tonight the TV news reported that the Texas Comptroller Office had agreed to release the funds, and ran a correction stating that at 3.00% its value would be about $7500.00, not $2.5 million as reported yesterday, even with compounding.

I wonder if the Wells Fargo employee's last name is Madoff...