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How does the frequency of compounding interest impact the growth of savings?

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How does the frequency of compounding interest impact the growth of savings? Empty How does the frequency of compounding interest impact the growth of savings?

Post by Beyonder on Fri Apr 29, 2016 1:15 pm

How does the frequency of compounding interest impact the growth of savings? Is when You are investing in the savings instruments, you can earn the interest at a contractual interest rate. The interest rate is usually stated as a yearly rate.

Example: If someone invests in a $1,000 in a certificate of deposit (CD) that pays an annual interest rate of 6%, a year later you will have $1,060. The $60 in interest you earn in a year is your compensation for deferring consumption today. If you decide to invest the $1,060 for another year at 6%.
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