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The key to get money faster is to start saving early. For example, putting $2,000 in the bank per year at a interest rate of 5% for 30 years vs 40 years results in a huge difference. That 10 year gap creates a difference of $500,000! 10 years gives almost double the return! It's not about the amount of money that you put in, because over time, the interest will earn back money itself.
There are two types of interest: Simple and Compound
Simple Interest: is interest based upon the principal amount only.
Formula:S= Principal * interest rate * time
Compound Interest: is "interest of the interest" so that each time the interest added is based on the past interest that was accumulated in past periods.
Formula:C= Principal * (1 + interest rate / compounds per year)^ compounds per year * number of years
To get more money, one must understand the differences between and uses of simple and compound interest. When saving money, it is better to have compound interest, as it grows your money faster (highly unlikely from a bank). When taking a loan, it is better to have simple interest as you will not have to give back as much (also highly unlikely from a bank).
There are two types of interest: Simple and Compound
Simple Interest: is interest based upon the principal amount only.
Formula:S= Principal * interest rate * time
Compound Interest: is "interest of the interest" so that each time the interest added is based on the past interest that was accumulated in past periods.
Formula:C= Principal * (1 + interest rate / compounds per year)^ compounds per year * number of years
To get more money, one must understand the differences between and uses of simple and compound interest. When saving money, it is better to have compound interest, as it grows your money faster (highly unlikely from a bank). When taking a loan, it is better to have simple interest as you will not have to give back as much (also highly unlikely from a bank).