The Power of Compound Interest

The Power of Compound Interest

These muñecas Rusas aren’t the only thing that can compound on one another. 🙎‍♀️👩‍👧👩‍👩‍👧Your interest can too. 😮

Compounding interest is like putting a bigger muñeca on top of the muñeca you already have, and then doing it again and again. Like, if you invest $2000 with 3.5% interest annually, you’d have $2070 after the first year. 📆 And THEN the next year, you get 3.5% on the whole $2070 upping you to $2142.45. And so on, and so on. 🙎‍♀️👩‍👧👩‍👩‍👧👩‍👩‍👧‍👧

Wanna know when your invested dinero will be doble?💰 Rule of 72! 72 ÷ by the interest rate = number of years it will take. 📆So, $2000 with 3.5% compounded interest will double in… 🧮 about 20.5 years.

Use the Rule of 72 to compare investments and see which gives the better (y más rápido) return.💃🏽

What other additional questions you have about compounding interest?

 

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