WHY YOU SHOULD START INVESTING AT AN EARLY AGE ?
                                COMPOUNDED INTEREST !!!!

                                                                                $ 100 INVESTED

                          10%                   15%                20%              25%                  30%
1 yr                    110                  126.50             151.80             189.75              246. 68
 
 
                                                                $ 200 invested
 
                         10%                      15%              20%              25%                  30%
1yr                   220                      253                 303.6            379.5              493.36
 
                                                                $300 invested
 
                         10%                      15%              20%              25%                  30%
1yr  .                440                        506              607.2               759                  986.72
 

 
 
EXAMPLE:

MARY  DEPOSITED $1,000 AT 10%  INTEREST RATE FOR 5 YEARS. HOW MUCH MORE MONEY WILL MARY HAVE IN HER ACCOUNT FROM COMPOUND INTEREST THAN FROM SIMPLE INTEREST IF IT IS COMPOUNDED SEMIANNUALLY? (two times a year)

SOLUTION:
SIMPLE INTEREST:
A=P =(P* R*T)
A=1000+(1000*0.1*5 )
A= 1000= (100*5)
A= 1000+500
A= $1,500

COMPOUND INTEREST:
                     K*N
A= P(1+R RK)*   2*5
A= 1000(1+0.1/2)
                          10
A= 1000(1+0.05) 10
A= 1000(1.05)
A= 1000* 1.62889
A= $1,628.89

$1628.89 (COMPOUND INTEREST)- $1500 (SIMPLE INTEREST)=$128.89

It doesn't seem like a big difference, but if you multiply this over a number of years, you then have a very big difference!
 
 

Calculations done by Kseniya Isakova