Compound interest

Often called the eight wonder of the world. Compound interest is basically reinvesting the

return on investment that basically means that, you are getting interest on something and you

are again lending that interest to produce even more interest.

In first table first one has spend 30, and he has 100 in capital left to be invested.
In second table he did not spend 30 and he has now 146.41 that is a smart gain of 16.41.
Money which he earned by REINVESTING the capital along with return on investment.
Again explaining it in simple terms, interest money usually doubles in let’s say 7 years
So you have 200 at end of 7th year, 400@ end of 14th year, 800 at end of 21st year, 1600 at the
end of 28th year, 3200 at the end of 35th year, 6400 at the end of 42nd year, 12800 at the end of
49 year and so on, if you see it differently, that is 200% return on investment guaranteed! Year
on year,
It doesn’t look much in initial years, but it becomes explosive in later years.
It’s said that the purchase of Manhattan island is the world’s most profitable investment, it was
bough for 24 dollars paid in beads and stuff, however if that 24 dollars was invested at 8%
compounded annually, it would have been about 24 trillion dollars plus, which would have
been enough to buy entire world many times over.