Monday, February 9, 2009

The Power of Compound Interest

You may not think you have enough to save to make a difference. If you save $100 a month, in 10 months you will have $1,000. If you invest $1,000 at a 10% interest rate, you'll earn $100 in interest at the end of the first year have a total investment $1,100. If you leave both your original investment and the earned interest in the account, the next year you'll earn 10% on the $1,100, which is $110. The third year, you'll earn interest on the $1,200 and so on for as long as you leave it there. At that rate, your money would actually double every 7 years.

I know interest rates are lower now but will come back in time. And any money you can save and earn interest on is better than not saving at all.

No comments:

Post a Comment