Скачать или смотреть What is compound interest?

Learn the basics of compound interest and why it's a huge part of growing your wealth.

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Transcript:
You’ve heard it before: save early and watch your money grow. Okay, but how does it grow and why is this so important? Two words: compound interest.
Compound interest is interest earned on your original deposit—that’s the principle—and the accumulated growth in your account. Here, let’s see it in action. With simple interest, the $25,000 bucks in your savings account earns 5% annually. Fast forward five years, you’ll have earned $6,250 in interest.
Not bad, but with compound interest you’re making interest on interest. If that 5% interest was compounded annually, in five years you’d have $31,907.04 in the bank, and in ten, $840,722.37. All without depositing another dime.
If you add money to the account, your growth is even greater. By adding just $200 per month, you’d have $45,168.55 in five years and another $70,909.31 in ten years. So if you’re saving dough, compound interest is the way to go.
But when you’re borrowing money, whether from credit cards or loans, it can be a burden, not a benefit. The bottom line: start saving early and regularly. Money doesn’t grow on trees, but it can grow with compound interest.