Menu
Home
Advertise
Forums
Search forums
What's new
Unread posts
Latest activity
Earn Money
Review Website/Apps
Passive Income
Money apps
Paid Survey
Stock
Forex
Real estate
Paid to write
Social Media Monetization
Crytocurrency
Bitcoin (BTC)
Ethereum (ETH)
Crypto Exchange
Mining
Crypto Faucet / Airdrops
Binance
Business
Business strategy
Funding a business
Marketing
Digital Marketing
Social media marketing
Email marketing
Brand management
Personal Finance
Money Saving
Personal loan
Retirement
Debt help
Savings for Students
Tax relief
Insurance
Car Insurance
Life Insurance
Liability Insurance
Home Insurance
Health Insurance
Disability Insurance
FAQ
Log in
Register
What's new
Search
Search
Search titles only
By:
Search forums
Menu
Log in
Register
Install the app
Install
Home
Forums
Money Making Forums
Business Ideas Forum
Understanding Compound Interest
JavaScript is disabled. For a better experience, please enable JavaScript in your browser before proceeding.
You are using an out of date browser. It may not display this or other websites correctly.
You should upgrade or use an
alternative browser
.
Reply to thread
Message
[QUOTE="Knowlopedia, post: 321504, member: 91868"] Compound interest is an important concept to understand when saving or investing money. It refers to the interest earned on the principal amount and any accumulated interest from previous periods. Compounded interest can help you earn more on your money than simple interest, which is why it is often referred to as "compounding your wealth" or "earning money on your money." Compound interest works in two stages. Firstly, the account holder earns a stated rate of return on their initial principal (also called the “balance”). Secondly, the interest earned accumulates with each new period and compounds upon itself. This means that additional interest is earned on top of the original principal, resulting in a higher total return. Calculating compound interest differs slightly from calculating simple interest. The formula for simple interest consists of multiplying the principal by the rate of interest and then dividing by 100: Simple Interest= Principal x Rate of Interest/100 The formula for compound interest involves multiplying the principal by one plus the rate of interest to the power of the number of time periods: Compound Interest= Principal x (1 + Rate of Interest)^Number of Time Periods For example, if an investor has $2,000 invested at a 10% return over a 20 year period, the compound interest would equal $7,503.75 ($2,000 x 1.10^20). Whereas with simple interest, this same investment would yield just $4,000 ($2,000 x 10% x 20 years). It's important to consider compound interest when making any type of financial decisions. As you can see from the example above, it can add up quickly and help you maximize your returns. Keeping an eye out for higher rates of return can lead to greater rewards in the long-term - so make sure you're prepared to take advantage of compounding whenever possible [/QUOTE]
Insert quotes…
Verification
Post reply
Home
Forums
Money Making Forums
Business Ideas Forum
Understanding Compound Interest
Top