Author Archives: Jayson Chang

Can You Sustain Your Wealth?

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When we talk about sustainability, we usually think about natural resources. However, after today’s lesson on exponential growth, I realized that money could also be sustainable. Can you sustain your wealth? The answer is yes.

According to one of the ten principles of finance, a dollar today is worth more than a dollar tomorrow because of inflation. So what can we do to prevent this from happening? INVEST!!

To assess if an investment is good, you must be able to compare the value of money that you invest today with the value of the money that you expect to receive in the future. We can do so by using the future value formula, which is EXACTLY like the exponential growth formula.

FV = PV * (1 + r) ^n

FV= future value (expected value); PV= present value (in terms of investment, PV is the total money you invest on a project); r = the project’s rate of return; n = time

Let’s say you invested $1000 in a 5-year project with a 10% rate of return, and you would like to know the expected value of that investment:

FV = 1000(1+ 0.1)^5 = 1610.51

1610.51 – 1000 = 610.51 = the “extra” money you are expected to earn from that investment.

 

exponential3Since this an exponential model, this usually means that the longer the project is and the more money you invest, the higher your expected value will be.

 

 

 

For example, say our parents invested $30,000 in the same project with the same rate, only difference is that this time it’s a 18-year old investment (could be for our college tuition)

FV = 30,000 (1+0.1) ^ 18 = $166,797.51

The net profit you make from that investment = 166,795.51 – 30,000 = 136,797.51

 

Doubling Time

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We learned about doubling time in an exponential growth process on Monday. I find this concept extremely fun. Here is a list made by the United Nations that shows countries’ population growth rate .

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According to the list, the country with the fastest growing population should be relatively good at allocating their resources. However, after going through the list, I learned that counties with fast growing population rate are mostly third world countries, like Liberia and Burundi, whereas the United States is ranked number 131 on the list. Let’s take Liberia, a country with a 4.5% population growth rate for example.

The time it takes Liberia to double their population can be calculated with the doubling time formula:

0.7 / 0.045 = 15 years.

Now if you think about it, if it only takes Liberia 15 years to double their total population, they need to have the ability to double their resources in 15 years as well, otherwise there won’t be enough resources for the next generation, let alone making the resources sustainable.

Greenhouse Gas Emission

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According to the United States Environmental Protection Agency , there is a decreasing trend in greenhouse gas emissions by gas from 2007 to 2012, mainly due to the increase in awareness. However, we are still generating about 6000 million tons of carbon dioxide per year.

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Just to put the number in perspective, the CO2 emissions from a gallon of gasoline are only around 9000 grams. In addition, the average annual CO2 emissions of a typical passenger vehicle are about ( assume that an average person drives a 21.6 MPG car around 11,400 miles per year)

 

Annual CO2 emissions = (CO2 per gallon / MPG ) x miles = 9000 / 21.6 x 11,400 = 4.7 tons.

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The total greenhouse gas emissions from transportation take up around 28% of the total GHS emissions. Fortunately, this means that there are still a lot of ways to reduce the total GHS emissions.

Can a Hybrid Save Me Money ?

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Since the oil demanded from Europe is low, gas prices across the nation about about to drop below $2 per gallon by February since 2009. However, this decrease in gas price does not necessarily mean we are saving as much money as we possible can.

Take a regular compact car as an example; the 2014 Toyota Yaris gets approximately 32 MPG in cities, with a 16-gallon gas tank. If a person drives spends most of his time driving in the cities, assuming that the gas price is 2 dollars per gallon, with a full tank he can drive

16 gal x 32 miles / gal = 512 miles

with the a cost of

$ 2 / gal x 16 gal = $32.

However, a person who owns a hybrid, a 2014 Toyota Prius for example, with 50MPG in cities and 16-gallo gas tank, can drive

12 gal x 50 miles / gal = 600 miles

with the same cost of the Yaris’ .

From another perspective, Hybrid cars also do less harm to the environment than do conventional cars. A conventional compact sedan emits about 87 pounds of CO2 while a hybrid electric car only emits 57 pounds of CO2.

It is because of the fuel economy that an environmental friendly car can deliver that the latest Consumer Reports has concluded that about 39 percent are considering buying a hybrid for their next car. Even though a hybrid car usually costs about 3000 to 4000 dollars more than a regular car, not only will owning a hybrid benefit the consumer, but it will also be favorable to the environment.

 

 

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Global warming and water supply

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Global warming is arguably one of the biggest topics that come to mind when talking about sustainability. Between 1906 and 2005, the global average surface temperature rose 1.1 to 1.6 Fahrenheit. In addition, this increase in temperature has doubled in the past 50 years. The climate change is going to have a huge impact on the sustainability of water supplies in the coming decades. This change however is brought by our own human activities that involve heavy emissions of carbon dioxide. In fact, since the Industrial Revolution began, the level of carob dioxide has increased almost 40 percent as of 2010.

In today’s lecture, we learned that about 27% of household water usage goes towards toilets. If we can somehow find a way to reduce that percentage by as little as 5% every year, I believe that will significantly increase our water supply in the future.

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Hi :)

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Hello everyone!
My name is Jayson Chang. I am a sophomore from Irvine, California, majoring in Supply Chain Management and Information System. I guess I am one of the few people who are not taking this as a GQ requirement. I am taking this course simply because I kind of like math and everything that has to do with math calculations just comes easy to me. My major entails delivering a product or a service from point A to point B with the fastest time, lowest cost, and minimal damage to the environment so I thought this class would give me a basic general idea of achieving one of those requirements. Outside of class, I spend a huge portion of time hanging out with my THON committee and people from my organization. I also love playing basketball and ping pong, and listening to all kinds of music.