Originally posted by PBE6
The details of the question were a bit unclear, so I'm going to assume you want to compare:
1) The cost of purchasing a steak at $10, plus the cost of freezing said steak for some amount of time "t"; and
2) The cost of waiting until time "t" to buy the steak and not freezing it.
I'm also going to assume you wanted the cost of the steak to increase cont s soon as you buy it or it's going to cost you to keep it in the freezer.
I was looking for how long into the future the value of the steak
would be exceeded by the value of the electricity.
So if it costs $175/ year for electricity, then dovide by 12 means it
costs 14 bucks and change per month. So after one month the
electricity is already 40 % more than the steak. So The gist is you
better eat it in the first week!
If you indeed saved the steak for 240 years, you better get more
than 42,010 bucks for it or you will only break even! (175$/yr X 240 years = $42,000)
So the gist of it is you wait more than a couple of weeks at that rate,
you are better off eating it and replacing it.
It makes the idea of long term frozen food storage look not so good,
financially. How good an idea is it to freeze food in the first place,
given that cost? You buy that steak for $10, one week later its up to
$13.30 or so, the electricity costs $3.30 odd dollars per week.
So you better shop sales and eat it that night and not freeze it.
I was thinking about this when I bought a bunch of bread to freeze,
the idea being at least I would'nt have to go to the store so much,
but the store is only one mile away, 1/20th of a gallon or so, at $3
per gallon, 0.15 to get there , 30 cents to make the round trip.
So you save a lot more not running a freezer and just buying new
bread when you need it. Interesting, eh?
Well, Xanth was wrong about the price, the steak would cost
just under $41,000 so you would lose a thousand bucks on the deal.
2^12 (4096) * $10= $40,960 (12 doublings in price)
Thats not even taking into account the fact that inflation would
up the cost of electricity at about the same rate as the overall
Looking at the added cost in terms of percent per day, its about
5 percent per DAY more to keep it frozen. Thats a price stiffer than
the frozen steak! Imagine if we could get that much interest at the
bank! Of course we are giving an example of a single steak, when
the average freezer could hold, say, 50 steaks, so 500 bucks worth
that goes up at the rate of one tenth of a percent per day.
So at the end of one year, the steaks now costs 675 bucks.
Still about 35 percent per year.