Power Of Compound Interest

Posted by pfadvice
September 23, 2006

Here’s a little video I came across that gives the numbers on why it’s important to start investing early and the power of compound interest – since I know people learn in different ways, I thought a visual might be helpful for those that have a hard time grasping the explanation in written form. For those who are looking for a bit more entertainment in seeing the power of compound interest, you can read Compound Interest, Manhattan & the Indians

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Information: September 23rd, 2006; 3 Responses

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Categories: Investing; Personal Finance

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Reader Comments

Comment Number:: 1
Written by:: Paul G
Posted on:: September 23, 2006 at 4:57 pm

Great example of the power of compounding.

Folks would be well advised to keep this in mind when taking out a loan as well.

Paul

Comment Number:: 2
Written by:: Tim
Posted on:: October 1, 2006 at 2:02 pm

The person who created this video had stolen content from the Vanguard website. I wouldn’t advocate supporting this director since he probably used a video camera to record his computer monitor.

https://flagship.vanguard.com/VGApp/hnw/content/SiteWide/FlashPgs/SWFlshPwrOfCompContent.jsp

Comment Number:: 3
Written by:: James
Posted on:: October 21, 2006 at 1:23 pm

This tutorial on Long Term Compounding Interest shows a graph where the monthly compounding amount of 148,940 is so much higher than the annual compounding of 146,419.

But in today’s economy, how do you achieve monthly compounding? Are there any tricks?

For example, i know of ING Direct offering GICs where you lock in your money for 4% for 6 months, so thats semi-annual interest?