The rule of 72 is a quick and accurate tool to predict how fast your will double in a given amount of time with a select interest. By dividing 72 by the annual interest rate you will get your answer. For example if you have $1,000 in the bank and you have 6% interest. 72 divided by 6 is 12. That means it will take 12 years for your money to double. Albert Einstein was originator behind this method. It is very valuable when you are managing money.
Compound interest is interest which is calculated not initial but during the a accumulated period of times. Money you earn yearly through interest. Is accumulated when the interest is added yearly.
Subscribe to:
Post Comments (Atom)
No comments:
Post a Comment