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how to calculate compound interest over time. Determine how much your money can grow using the power of compound interest. If an amount of 7000 is deposited into a savings account at an annual interest rate of 5 compounded monthly calculate the compound interest after 3 years.
Calculation Of Compound Interest Compound Interest Investing Investing Money from in.pinterest.com
Remember to calculate in inflation as services may be more expensive by the time you retire. Determine how much your money can grow using the power of compound interest. This formula can be expressed algebraically as.
The Rule of 72 is another way to make estimates about compound interest quickly.
P is the principal the amount money borrowed or invested r is the interest rate per year or per annum n is the loan or investment duration in years. Length of Time in Years. This rule of thumb tells you what it takes to double your money looking at the rate you earn and the length of time youll earn that rate. Additionally things like healthcare may become more costly as you get older.
