Compounding Interest Effect
Compounding interest is the phenomenon where the interest given is re-invested consecutively to the original fund.
The compounding interest might not make much different in the initial year however, it make a remarkable different in amount in the end of a long-term period. The chart below is taken directly from Smart Couple Finish Rich by David Bach which the author had give the permission for anyone to duplicate it to share with their friend.
You will get more understand by study the table below. Click to enlarge it.
Albert Einstein, widely consider one of the greatest minds of all time, regard compound interest as most amazing phenomenon he had ever come across. Compounding interest is a double-edge knife which is a great tool for cutting thing but cutting yourself too, if misuse it.
