Download and keep my free compound interest calculator.
Because so many people do not understand the concept of compound interest, I’m making available the compound interest calculator I use to find out how much I could have saved if the bank had not taken its illegal charges.
The sums involved are much more than you would think. To give an extreme example, consider this: If you start with one penny at the beginning of the month and double it every day, how much money will you have at the end of the month? The answer will astonish you, but before I let you know what it is, most people tend to think it would be a few pence, or a couple of pounds or so. 1+1=2, 2+2=4, 4+4=8. It’s nothing, is it?
Many people think that the interest rate on their credit card debt or bank loan is worked out on a ‘flat rate’ basis. In other words, if the monthly rate is 2%, over twelve months it adds up to 24%. In fact, because of compound interest it’s 26.82% – a seemingly small difference, but a crucial one. Over ten years, flat rate interest at 2% will make £100 worth £340 (120 months x £2 = £240 plus the original £100 = £340). In the same time, compound interest brings its value to £1029.25 - some difference!
This is where the banksters score. We tend to think that their monthly interest rate of 2% for example, is quite modest and won’t cost us too much if we keep the balance on the credit card. Month by month that may be so, but over a relatively short period My compound interest calculator shows how those amounts quickly add up when the last month’s interest is added before calculating next month’s balance.
My free compound interest calculator will show you just how much it’s costing you to keep those balances and will also reveal how much the banksters have been profiting from you.
By the way, the answer to the question is £10,737,418.24 – £10.7 million! Here’s the proof.
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Good job over again. Thumbs up:)