Exercise 1: Calculating the FTSE 100's Real Four-Decade Growth — Possible Solution
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Using this chapter's own real figures:

Percentage growth = (Ending value - Starting value) / Starting value x 100
                   = (10910.55 - 1000) / 1000 x 100
                   = 9910.55 / 1000 x 100
                   = 991.055%

Alternatively, expressed as a multiple: 10910.55 / 1000 = approximately
10.91 times the starting value - the index is now worth roughly 10.9
times what it was worth at launch, which is what this chapter means by
"roughly a tenfold increase."

WHY THIS CONNECTS DIRECTLY TO CHAPTER 1'S COMPOUNDING MATERIAL
Chapter 1's own real, worked example showed how a fixed annual growth
rate compounds an amount of money into a much larger figure over 20
years, purely through the mechanics of the compound growth formula
FV = P x (1+i)^n. The FTSE 100's own real growth from 1,000 to
10,910.55 over roughly 42 years (1984 to 2026) is the identical
underlying mechanism, just observed as a real, historical outcome
rather than a forward-looking projection: a real index that grows by
some average rate, compounded year after year across four decades, can
turn a modest starting value into a figure many times larger, even
though no single year's own growth rate needs to be dramatic on its
own.

WHY THIS ISN'T A CONTRADICTION OF CHAPTER 3'S OWN CAUTIONS
This real, historical figure is worth reading carefully rather than as
a promise: it represents one specific, already-completed 42-year
period, not a guaranteed future rate. Chapter 3's own material on
Black Monday and market volatility is a direct reminder that this real
growth did not happen in a smooth, uninterrupted line - it happened
across many individual years of gains and losses that, averaged out
and compounded over four decades, produced this specific real result.

ANSWER: The FTSE 100 grew by approximately 991% (or roughly 10.9 times
its own starting value) from its 1,000-point launch in January 1984 to
its real all-time closing high of 10,910.55 in February 2026. This
connects directly to Chapter 1's own compounding material because it
demonstrates the identical underlying mechanism - a modest starting
value compounding over several decades into a much larger figure - just
observed as a real, completed historical outcome across roughly 42
years, rather than a projected calculation for the future.

WHY THIS WORKS AS AN ANSWER
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This correctly calculates the real percentage growth (and the
equivalent multiple) using the chapter's own stated figures, and
explains the specific mechanical link back to Chapter 1's own
compounding formula rather than simply noting that both chapters
involve growth over time.