The dictionary definition of Compound interest is interest paid on both the principal and on accrued interest. Compound interest in general is the amount of interest that is earned by the amount of money that you gain. But you actually never get to touch that money. The more time invested, the more money in interest you will have. As my picture demonstrates, time equals money anywhere and everywhere. In the picture of Einstein pointing to the board, it says how compound interest is the ninth wonder of the world and he makes a point because with the 72 formula which basically calculates the amount of years that it will take for your money to double which is great. Albert Einstein is considered the father of compound interest because he created it. I think that he created this for wealthy people to benefit because the more money you have to begin with, the more the interest rate will go up and ultimately will make you richer in the end making wealthy people very powerful !
Monday, March 19, 2007
Compound Interest and the rule of 72
The dictionary definition of Compound interest is interest paid on both the principal and on accrued interest. Compound interest in general is the amount of interest that is earned by the amount of money that you gain. But you actually never get to touch that money. The more time invested, the more money in interest you will have. As my picture demonstrates, time equals money anywhere and everywhere. In the picture of Einstein pointing to the board, it says how compound interest is the ninth wonder of the world and he makes a point because with the 72 formula which basically calculates the amount of years that it will take for your money to double which is great. Albert Einstein is considered the father of compound interest because he created it. I think that he created this for wealthy people to benefit because the more money you have to begin with, the more the interest rate will go up and ultimately will make you richer in the end making wealthy people very powerful !
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