Visualize the extraordinary power of compound interest
The power of compound interest is so compelling that it has often been called the “eighth wonder of the world”.
See the 2017 Letters on Hedge Funds.
Find out why this concept is so fundamental to personal finance in the following infographic:
ADW Capital presents theses for PAR Technology, RCI Hospitality and CDON
Like most other hedge funds, ADW Capital was in the red in the first quarter, returning -27.34%. The S&P 500 was down 4.6% in the first three months of the year, while the Russell 2000 was down 7.53% and the Russell 2000 Value Index was down 2.4%. Since its creation in 2011, ADW Capital Read more
Think you already know how to use and calculate compound interest?
Check out this exercise created by Next Gen Personal Finance and see how you do. There are also many other free personal finance lessons available in the activities section of their website.
What is compound interest?
In other words, it is interest on interest.
In the first period of capitalization, this interest is low – but in the long term, interest on interest is a big problem!
The composition of interest depends on three variables:
Interest rate: The rate drawn from savings or an investment
Time: The time left for money to accumulate
Taxes: Timing of taxation can make a big difference
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Wealth 101 Article