Questions tagged [compound-interest]
Compound interest is the result of reinvesting interest so that interest in the next period is then earned on the principal sum plus previously accumulated interest.
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Is there a concept similar to "continuous compounding" but related to dollar cost averaging when buying (e.g.) shares or bitcoins?
I know that dollar cost averaging (DCA) is "drip feeding" a total amount to be invested over regular intervals like daily, weekly or monthly, so that each share purchase (or whatever the ...
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Calculate term of mortgage based on monthly payment value
Using the PMT formula in Excel, I can calculate the monthly payments based on the interest on the loan (e.g.2%), the principal value of the loan (e.g. £100,000), and the term of the loan (e.g. 25 ...
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Calculating the compounding interest formula for an overnight rate
I am VERY NEW to all this industry, so I apologize in advance if my question is too simple.
I am given the formula to calculate the compounded rate, where Ri is the effective rate and k is the ...
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Inflation and the current value of my dollar
I am trying to figure out the value of my $100 with a hypothetical 2% constant inflation rate after 30 years.
Here is the scenario: suppose I have $100 laying under my bed and the hypothetical ...
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Is it good to invest in mutual fund during the down time in market?
Say there is a mutual fund and its annual return in the past 3 years i.e. 2017, 2018, 2019 were -10%, +20%, and -10% respectively.
A and B invest $100 in this fund at different time points. A ...
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Can I renegotiate desirable rates and terms on a paid-off credit card?
I would like to keep and use my business credit card, but I do not need it. I paid off around $10k today which took my balance to zero, now that my 0% introductory rate has ended. (The card is around ...
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How much benefit we earn with no cost emi on CC
I am thinking to take a policy on no cost emi of CC. I want to find money I saved annually by opting to no cost emi against paying all premium lumpsum at the start of the year. I want to consider ...
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Find ending balance given return rate and amount added each year
If I have an investment that grows 10% per year, and every year I add an amount, is there a formula that can be used to find my ending balance after n years?
The following demonstrates this:
year 0: ...
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Average Yearly Return: is this correct?
If an initial investment of 100'000 results in 200'000 after 10 years (including the initial investment), is it correct to say that the investment has returned on average 10% per year?
I am guessing ...
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Compound interest rate
Given annual interest rate r_ann and n compounds per year, why do we use the formula
(1+r_ann/n)^tn
rather than (1+r)^tn given r = (1+r_ann)^(1/n) - 1.
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How does a break in contributions (eg. working holiday) affect superannuation over time?
I'd like to better understand how a break in superannuation contributions during a working holiday affects the long term balance.
Say I'm 35 years old and accumulated $100,000 AUD in Australian ...
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Buy and hold to mitigate taxation
Today I came up with a reason why selling stocks too early might be a bad idea:
Imagine that we invest $100 in stocks. If we assume a constant annual growth of 10% the after say 50 years, we would ...
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Calculate hypothetical stock value in n years at todays' dollars? [closed]
I'm new to investing.
If I buy hypothetical stock that meets this criterion:
100 shares at $100 per share
Shares increase in value by 10% per year
Inflation is 2% per year
In today's dollars, what ...
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How has the modern era of low dividend paying index affect the principles of compound interest?
From my understanding:
*To keep it simple, we will keep the asset as index S&P500, not including asset allocation.
Compound interest (or compounding interest) is interest calculated on the ...
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How to calculate savings account interest if you deposit and withdraw irregularly?
It's easy to calculate interest on a fixed principal. If you have for example $1000 deposit on your savings account and the rate is 0.25% compounded every whatsoever and you want to know how much is ...
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