How does simple and compound interest played a part in your life?
442073
on any car loan you might obtain.
997933
If compound interest is so simple that it is taught in high school, how come it took Albert Einstein, arguably the greatest scientist in the world, to call it the 8th wonder of the world?\n\nWas it to remind us that we forgot about a magic theory? Really, understanding compound interest is very, very difficult. The human mind does not comprehend such growth so easily. We in our physical selves have a simpler type of growth. So we do not comprehend compounding of growth. A few old, really old stories might just help.\n\nLet us start with the famous story of the Persian emperor who was so enchanted with a new 'chess' game that he wanted to fulfill any wish the inventor of the game had. This inventor, a mathematician, decided to ask for one seed of grain on the first square of the chessboard doubling the amounts on each of the following squares.\n\nThe emperor, at first happy about such modesty, was soon to discover that the total yield of his entire empire would not be sufficient to fulfill the 'modest' wish.\n\nThe amount needed on the 64th square of the chessboard equals 440 times the yield of grain of the entire planet. Just try converting into money in any currency and you will realise the importance of compounding.\n\nA similar analogy is that one penny invested at the birth of Jesus Christ at 4% interest would have bought one ball of gold equal to the weight of the earth in the year 1750. In 1990, however, it would buy 8,190 such balls of gold.\n\nAt 5 per cent, interest it would have bought one ball of gold by the year 1466. By 1990, it would buy 2,200 billion balls of gold equal to the weight of the earth!\n\nThe example shows the enormous difference 1% makes. It also proves that the continual payment of interest and compound interest is arithmetically, as well as practically, impossible.\n\nJust see what a difference it would have made if your great grandfather had invested in a bank fixed deposit only Rs 100 say 150 years back. What it would have grown to?\n\nHere is a dream sheet. See for yourself. Imagine Rs 100 is invested and it grows at 10 per cent every year.\n\nColumn 2 is what it will grow to if it was held for the number of years in column 1. So if your great grandfather invested Rs 100, 150 years ago, you would have inherited Rs 16 crore (Rs 160 million).\n\nNo. of years it is invested for:\nWhat it would grow to\nin Rupees:\n\n1  110\n\n5  161\n\n10  259\n\n15  418\n\n25  1,083\n\n50  11,739\n\n100  1,378,061\n \n150  161,771,784\n\n200  18,990,527,646\n\n300  261,701,099,618,845\n\n400  3,606,401,402,752,540,000\n\n500  49,698,419,673,124,400,000,000\n\n\nSo what is the learning from this sheet? Even a 1 per cent difference can make a mountain of a difference, but the greatest difference is made by the number of years the money remains untouched. That is the key.\n\nFor those more mathematically inclined, I state below the formula:\n\nVn = Vo * (1+r)^n\n\n'n' in the compounding formula is the number of times the amount is compounded.\n\nBut for practical purposes if you take that as the time for which you stay invested in an instrument, you would not be too wrong either.\n\nWhat it means is that:\n\nThe amount of money that you require (Vn) is equal to the amount invested today (Vo) multiplied by [1+ interest rate (r)] raised to the number of times the amount is compounded (n).\n\nIn this formula you as a client can control how much money you want at the end of the waiting period (Vn), how long the money can be invested (n), and how much money you can invest today Vo.\n\nInstead of worrying about 'r', just start investing. That is the key.\n\nTakeaways:\n\nStart investing early.\nDo not touch the amount for a long time.\nDo not keep jumping from one investment instrument to another.\nLet the power of compounding work for you. It would have worked for your grand-dad, dad and you. If they knew it, great. If they did not, you can start the line. At least your grandchild will pra
700205
It depends on the interest rates, what instruments of investment your using and the apr rates.
729110
Interest Calculators, use these ones..
1103157
With mine the loan interest is next to nothing, much cheaper. It's also much easier to obtain a loan in the first place with credit union.
195821
The answer to your question, It will compound to $315,012.50 dollars in 20 years.\nOne of the easy way to caculate compound, you can do it online at Moneychimp.com.  Click on the link below.\n\nhttp://www.moneychimp.com/calculator/compound_interest_calculator.htm
178061
US Treasury bond is calculated using a compound interest method.  This means that the interest that you receive on your US Treasury bond for any given year is the stated interest rate multiplied by the sum of the principal and the cumulative interest that you have earned but not received in the preceding years.
664621
Is it simple interest or compound interest?\nSimple interest:\nI = Prt\nCompound interest:\nI = P(1+r/n)^(nt) - P\nP = 100,000, r = .10 and t = 3\nFor simple interest:\nI = 100,000(.10)(3)\nI= 30,000\nFor compound interest:\nI = 100,000(1+.10/1)^3 - 100,000\nI = 133100-100000\nI = 33,100
377198
Formula:\n\n\n\nP is the principal (the initial amount you borrow or deposit) \n\nr is the annual rate of interest (percentage)\n\nn is the number of years the amount is deposited or borrowed for.\n\nA is the amount of money accumulated after n years, including interest. \n\nWhen the interest is compounded once a year: \n\nA = P(1 + r)n \n\n\nHowever, if you borrow for 5 years the formula will look like: \n\nA = P(1 + r)5\n\nThis formula applies to both money invested and money borrowed.\n\nFrequent Compounding of Interest:\n\nWhat if interest is paid more frequently? \nHere are a few examples of the formula: \n\nAnnually = P × (1 + r) = (annual compounding) \n\nQuarterly = P (1 + r/4)4 = (quarterly compounding)\n\nMonthly = P (1 + r/12)12 = (monthly compounding)\n\n\nApprox. $716.43 I believe
240247
You must add one important detail: is it 4.8% per annum (yearly) or monthly?\n \nIf it's per annum:\n1000 * [1 + 0.048/12]^months\n \nIf it's per month:\n1000 * [1 + 0.048]^months\n \nTo find out how much after 1yr and after 2yrs, subtitute months by 12 and 24.\n \n \n\nIn Reply to the Mar 6, 2006 addition\n  \nLynn, you did say "compounded monthly" and people will almost always take this as "per annun with monthly componding" and almost always, it is. But it's not necessarilly so. It could be 4.8% per month with monthly compounding, for example. Ok, I'm kind of pushing it, but it's still true. You should be aware of these trick questions.\n \nAlso be aware that there are countless ways to calculate interest. I've worked with finance all my life and am a PhD student now and still see new ways once in a while. There are several things that may affect the result and the way to work thru the problem. The kind of interest you are learning now is a very basic form and for now you should only be aware that the way the interest rate is expressed must refer to a period. This period has no relation to the compounding period. Usually, it will be per annum but doesn't have to. For example, my bank informs me of the overdraft interest rates as a monthly rate, it is compounded daily but in a completely diferent way than the one you're learning. So keep in mind that you might be asked a question in which the rate is (for example) 5% per semester with semi-monthly compounding, over a period of one year. That is a legitimate question and will result in more than 10% per year. Good luck.
1003886
The answer is YOU!  The best way to eliminate debt is with a simple interest loan.  This allows your payment to have a bigger impact on your principal balance and not interest and fees.  A simple interest loan is commonly a secured loan such as a 2nd mortgage.  In addition you can set the term between 5 and 30 years.  The 30 year loan will give you the smallest payment, so make sure you don't have a prepay penalty.
894668
the equation for interest is I=p*r*t\n\nso plug in 400 for I, 5000 for P and 4 for T(time) in years:\n\n400=5000*r*4\n\nthen you just solve for R\n\n\nhope that helped
1157375
That's too general of a question.  If you've been responsibly paying your debts and have responsibly consolidated to reduce the interest you pay, it's different from the kind of consolidation done in response to credit problems.\n\nWebsites aren't going to be able to answer that question.
781704
My husband and I have a seperate savings account that we add to every week.  When life gets in a rut, we pull some money out and take a little weekend trip somewhere.  Go camping, take a wine trail, or head for the coast.  It's exciting to do something different and good for a relationship
187400
The compound interest formula is A=P(1+r/n)^(nt), where P is the principle you start with, A is the amount you end with, r is the annual interest rate, n is the number of compounding periods per year, and t is the number of years.  So for compounting daily, n=365.  But if you are adding to the principle weekly, you'll need the formula for annuities.  see: http://www.1728.com/annuity2.htm
309989
You pay taxes on the interest you are paid by the bank, not on the money itself. If you have $1000 and get $20 in interest, you pay taxes on the $20. The tax on the $20 may be around $5, but you are still $15 ahead of where you would be if you put it in a safe box
109498
it will double with 18% interest in four years.  Lots of ways to do it, none are guaranteed.  Try paper trading in the futures market for a while and see if you have a knack for it.  That's a good way actually, as long as you aren't a gambler type and you keep your goals realistic.