Wednesday, February 21, 2024

"What is Compounding:How Your Money Increases over time"



Compounding is The Process Which an Asset's Earnings, From Real State, investment,Share/stock Market, Capital Gains or Interest are Reinvested To Generate Additional Earnings in Future Periods.As My opinion it's"earnings interest on Interest Or making Money From Money"

'As my side More Compounding ever is Share/Stock market',In Long Term.

Here's is an Example to Illustrate Compounding:   

                    Let's say You Invest $2000 on savings Account That Pays 10%  Interest Annually.After the First Year You would earn $2000*10%=200 interest, Bringing Your total to$2200.

                                      In the second Year,you earn                   10% on the new Total of $2200,which is             $2200*10%=220.So, Your Total of  at the end of Second Year Would be $2420.

                         This Process Continues, With Your                 interest Earning More Interest Each Year Over Time, Compounding Can Significantly increase Your Investment.

        "AS MY OPINION COMPOUNDING IS NOT FOR SHORT TERM,ITS FOR LONG TERM" GIVE YOU ALOT OF MONEY.

Thanks for Reading

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