|
Now, let's make
it quarterly...
Compounded
quarterly
(four times a year)
means that, at the end of each quarter (three
months), they'll add
3% to your account.
(Remember that this is
3% of what's in the
account at that time.) |
Do you see that,
the more times the account is compounded, the more money we
make? Sure, it's only a really small increase, but, if we
invest a million dollars... Then, it's going to make a big
difference!
OK, so how can we
figure out compound interest without having to go through each
little step? If we had invested that dollar for 20 years,
that chart thing would have been a real pain!
The answer is:
SPLIT
FACTOR!
Compounded money
grows the same way alien amoebas grow! But, since it's
money, it'll make more sense to call it the "growth factor."
Continued on the
next
page
|
The printing
and distribution and/or downloading of these lessons is strictly
prohibited. |
|
