THE POWER OF INTEREST

DAVE RAMSEY'S INVESTMENT CALCULATOR

Interest is the fee for the use of money over time.

What are some items you may loan to a friend?

What is the opportunity cost when loaning something to someone else? The owner does not get to use the item for a period of time.

Interest is paid by a borrower and received by a lender or a saver. A saver is paid when they allow a borrower to use their money for a period of time. Interest is paid by a borrower and received by a lender or a saver. Who pays interest? Who receives interest?

“HE WHO HAS THE Gold---Rules!”

Double A Penny For One Month—How Much At End? “I do not believe Dave Ramsey’s claim.” Go to Excel

simple interest A1 Type the word Simple A2 Type in 100 A3 = A2 + 5 Paid on the amount of the original investment and does not change over time. A1 Type the word Simple A2 Type in 100 A3 = A2 + 5 Drag

compound interest Paid on the amount of the original investment and all accrued interest. C1 Type Compound C2 Type 100 C3 = C2 * 1.05

Add $2,000 starting with a $100 investment E1 Title Add $2,000 per year E2 Type 100 E3 = (E2 * 1.05) + 2000

Rule of 72 How many years to double your money? Divide 72 by the Interest Rate Interest rate is 4 72/4 = 18 years. Interest rate is 18 72/18 = 4 years