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Premium Bonds Calculator query
Comments
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forgotmyname said:Does the chance of being equally lucky year after year diminish the odds of further winnings?
I've read that it is can sometimes be a bit of a problem getting your money out quickly if you need it, so I'm beginning to wonder if it is really worth for 0.9% 'interest' not guaranteed.0 -
forgotmyname said:Does the chance of being equally lucky year after year diminish the odds of further winnings?
Trying to figure this out but the answers are too variable. Bit like flipping a coin.....
Sometimes you can beat the average and then your luck fades away and your average plummets.
In the context of Premium Bonds, chance relates to the statistical probability of something happening in the future, whereas luck is more about a measure of actual performance versus that probability.
The chance is static, so every bond has a 1 in 34,500 chance of winning a prize in a given month, and that's the same regardless of how many bonds you have, how long you've held them for, how many prizes you've won, etc - if a bond wins a £1m prize one month, it still has exactly the same odds as all other bonds of doing so again the next month, as they're independent events.
However, the fact that the chances of winning are so slim means that the actual outcome is hugely variable from one month to the next, which is effectively what people mean by luck being variable.0 -
The left hand side of the calculator is still broken. If you ask it ("what will I win?") for the likely win for £50k over 1 to 5 years you get:
1 year £450
2 years £750
3 years £1000
4 years £1500
5 years £1500
which is not just rounding errors. Or keep the time steady at 5 years, and vary the amount:
£5000 £200
£10000 £450
£15000 £500
£20000 £750
£25000 £1000
£30000 £1000
£35000 £1500
£40000 £1500
£45000 £1500
£50000 £1500
Results on the right hand "how lucky am I?" question seem consistent, however.
(well, looking at the "The full odds" 'explanation', it is in a sense a rounding problem - but the figures they round to are ridiculous. It "explains" your odds with £5000 over years of winning at least the following amounts are:
...
...At least £1,000Virtual certaintyAt least £1,500Virtual certaintyAt least £2,50030.7%At least £5,0001 in 184
which is a pointless thing to tell you. So "what will I win?" is really answering "it is more than 50% likely I will win £1,000, £1,500, £2,500 etc." So in practice everything above £1,500 is rounded down to it, £1025-£1475 down to £1000, etc.0 -
EthicsGradient said:(well, looking at the "The full odds" 'explanation', it is in a sense a rounding problem - but the figures they round to are ridiculous. It "explains" your odds with £5000 over years of winning at least the following amounts are:
...
...At least £1,000Virtual certaintyAt least £1,500Virtual certaintyAt least £2,50030.7%At least £5,0001 in 184
which is a pointless thing to tell you. So "what will I win?" is really answering "it is more than 50% likely I will win £1,000, £1,500, £2,500 etc." So in practice everything above £1,500 is rounded down to it, £1025-£1475 down to £1000, etc.
1 year £450 - reasonably meaningful 54.3% chance of this 0.9% annual return.
2 years £750 - 86% chance of at least £750 but next point chosen is £1000 (33.9% chance). Real median presumably about £900.
3 years £1000 - 97.7% chance of at least £1000 but next point chosen is £1500 (32.2% chance). Real median presumably about £1350.
4 years £1500 - 93.4% chance of at least £1500 but next point chosen is £2500 (6.87% chance). Real median presumably about £1800.
5 years £1500 - 'virtual certainty' of at least £1500 but next point chosen is £2500 (30.7% chance). Real median presumably about £2250.
As you've seen, the key is not just to look at the headline 'what will I win?' figure but to review the full odds tab too, as this tells a more meaningful story....0
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