This is a case of compound interest where you are reinvesting the entire capital plus profit every month.

The general formula for compound interest is:

$A = P \left(1 + \frac{r}{n}\right)^{nt}$

Where:

• $A$ = the final amount (capital after 120 months)
• $P$ = initial principal (starting capital)
• $r$ = interest rate per period (monthly interest rate)
• $n$ = number of times interest is compounded per period (in this case, every month, so $n = 1$)
• $t$ = time the money is invested for (in this case, 120 months)

Given:

• $P = 40,000$
• $r = 10\% = 0.10$ (monthly interest rate)
• $n = 1$
• $t = 120$ months

Substituting these into the formula, we can calculate the capital after 120 months.

Let me compute this.After 120 months of earning 10% monthly on your capital and reinvesting both the profit and capital, your total capital would grow to approximately $3,708,362,752.71.

Would you like more details or have any questions?

Here are five related questions to explore further:

1. How does the growth rate change if you earn a different percentage, say 8% or 12%?
2. What if you compounded quarterly instead of monthly?
3. How much profit would you have earned by the 60th month?
4. How would the outcome differ if you only reinvested a portion of the profits each month?
5. What if you started with a different initial capital, say $50,000?

Tip: Compounding works best over time because it multiplies not just your capital, but also the interest you've already earned!