Compound Interest is paid on the original principal and on the accumulated past interest. When you borrow money from a bank, you pay interest. Interest is really a fee charged for borrowing the money, it is a percentage charged on the principle amount for a period of a year.
Example:Annually = P × (1 + r) = (annual compounding)
Quarterly = P (1 + r/4)4 = (quarterly compounding)
Monthly = P (1 + r/12)12 = (monthly compounding)
Rule of 72 is a simplified way to determine how long an investment will take to double, given a fixed annual rate of interest.dividing 72 by the annul rate of return investors can get a rough estimate of how many years it will take for the initial investment to duplicate itself.
192,122.92 over 47 years at 8% saving 1 dollar a day.
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