Want to know simple and compound interest profit and loss? Here we are again to continue our topic about compound interest. In our previous topics, we discover the beauty and wonder of compound interest especially when you start investing early. Now, let us assume that you (the readers of Compound-Interest.Net) experienced delayed investing or the term called “procrastination”.
Simple and Compound Interest Profit and Loss
It is true that when you invest early, your money will grow too much. Today, you have to know the impact of compound interest when you invest too lately.
Situation Number 1.
John Doe is a 18 years old invest money worth $5,000 (gave to him by her grand mother). He invest his money in a vehicle that earns 12% per year within 32 years or when he reach 50 years old.
After 32 years, his money turned to $187,908.63. Amazing profits, right?
Situation Number 2.
Jayson is a 25 years old has the same amount of money worth $5,000. He invest it in a vehicle that earns 12% per year within 25 years or when he reach 50 years old.
After 25 years, his money turned into $85,000. Amazing profit, right? But why John is richer than Jayson? It is because of compound interest. The more years your money will stay invested the more profits it can generate.
Related: Compound Interest Explained by Albert Einstein
The question is, is compound interest only for young investors? No, it just happened that a compound interest will really favor the young investors than those who delayed their investments. Remember this simple and compound interest profit and loss to get inspired in investing your money as early as you can!