What compound interest really means is when you borrow money from a bank and have to pay interest. Interest, is the extra money owed to the bank due to the fact that you borrowed money; like a fee. The concept of interest is so that the bank makes money in the process of letting you borrow it.
Suppose the starting principal was $100.00 and the annual growth rate was 10%, in three years the future value would be $133.00
The website below allows you to enter the annual rate, savings rate, and monthly contributions. After entering those amounts, it shows a graph and explains the interest rate.
http://www.ingnz.com/WEB/webm.nsf/CompoundInterest?OpenForm
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