Compound Interest and the Rule of 72

Compound Intrest is when you gain intrest on the amount you have already gainned intrest on. If you have 50% a month intrest rate and u currently have $100 with regular intrest you gain $50 dollars every month. If you have compound intrest The 1st month you would gain 50% intrest on $100, so the next month you have $150 and instead of getting 50% intrest on the original you get 50% intrest on the new amount $150. The amount of intrest you get will go up. 1st month you gain $50 second $75.
Rule of 72 is a way of figuring out how long it will take for an investment gainning intrest to double. The formula is simply 72 divided by the intrest rate.

Compound Interest and the Rule of 72

Compound Intrest is when you gain intrest on the amount you have already gainned intrest on. If you have 50% a month intrest rate and u currently have $100 with regular intrest you gain $50 dollars every month. If you have compound intrest The 1st month you would gain 50% intrest on $100, so the next month you have $150 and instead of getting 50% intrest on the original you get 50% intrest on the new amount $150. The amount of intrest you get will go up. 1st month you gain $50 second $75.
Rule of 72 is a way of figuring out how long it will take for an investment gainning intrest to double. The formula is simply 72 divided by the intrest rate.