We are talking about compounding over here. As mentioned before, using Rule of 72, that is, taking 72 divided by the percent-return, that is the number of years needed to double your money. It also means that you have to put all the new money to work immediately once you receive it.
This is how it goes:
To double your money in 2 years, you need 41.42% per year.
To double your money in 5 years, you need 14.87%
To double your money in 10 years, you need 7.18%
Now, prepare for the eye opener...
To double your money based on 10% monthly compounding, it will take 8 months!!
Question is, do we have an instrument that pays interest (ie. returns) monthly? How safe are investments like this?
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