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The Rule of 72 illustrates the power of compound interest: The longer your money stays invested, the more it grows.” ... For a totally accurate measurement, you can use a compound interest ...
The power of compounding: How compound interest benefits your savings. If you’ve ever wondered how someone attained a sizable nest egg or amassed millions, compound interest surely played a role.
As the number of compounding periods tends to infinity in continuous compounding, the continuous compound interest rate is referred to as the force of interest . For any continuously differentiable accumulation function a(t), the force of interest, or more generally the logarithmic or continuously compounded return , is a function of time as ...
The interest rate you earn on your money also has a major impact on the power of compounding. If the savings account paid 5 percent annually instead of 2 percent, the ending balances would look ...
It provides a good approximation for annual compounding, and for compounding at typical rates (from 6% to 10%); the approximations are less accurate at higher interest rates. For continuous compounding, 69 gives accurate results for any rate, since ln(2) is about 69.3%; see derivation below. Since daily compounding is close enough to continuous ...
Processing power of computers. See also Moore's law and technological singularity. (Under exponential growth, there are no singularities. The singularity here is a metaphor, meant to convey an unimaginable future. The link of this hypothetical concept with exponential growth is most vocally made by futurist Ray Kurzweil.)