![]() A clear benefit for Investing money when compounding interest is used makes your money grow at a faster rate and allows you to put away less money to reach your financial goals. Simple interes t is the interest earned on only the principal on a loan or deposit while compound interes t is the interest on a loan or deposit calculated based on both the initial principal and the accumulated interest from previous periods (which could be daily, monthly, quarterly or annually). ![]() Interest is calculated in two ways – as simple interest or as compound interest. When you lend, or invest, money, you earn interest. ![]() Interest is the cost of using somebody else’s money. He who understands it, earns it he who doesn’t, pays it”. Albert Einstein once said “ Compound interest is the eighth wonder of the world.
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