8.31.2007

Explaining compound interest

"The most powerful force in the universe is compound interest." - Albert Einstein

Basically, it's the your original money can make interest. If the interest rate is high enough and the money sits for a long enough time, pretty soon the interest you made can make interest. And this is the power of compound interest.

Look at this way... let's say that you save $1000 and put it away right away. Let's say that (to make things simple), that $1000 earns 10% every single year... here is how much you would have after a certain amount of year:

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1 comment:

Anonymous said...

"Basically, it's the your original money can make interest."

I think the word "the" is supposed to be the word "that"