Why is interest that is compounded better than interest that is not - ProProfs Discuss
Advertisement

Why is interest that is compounded better than interest that is not when saving for retirement?




Asked by Jrohrer, Last updated: Aug 29, 2021

+ Answer
Request
Question menu
Vote up Vote down

1 Answer

C. Marcus

C. Marcus

C. Marcus
C. Marcus, Content Developer, Washington

Answered Jun 28, 2018

A compound interest will allow you to get more returns for your money. A lot of people pay for simple interest. This means that they only have to pay for what they spent or what they have invested in. For compound interest, people will pay not only for what they spent or invested on, they also have to pay for the interest that they have earned because of the investments.

This will increase the amount of money that people can save up in the long run. It may not seem like much but it will surely be effective for people’s needs. Take note that some accounts that use compound interest would work daily while others would work annually. There are different options available.

upvote downvote
Reply 

Advertisement
Advertisement
Search for Google images Google Image Icon
Select a recommended image
Upload from your computer Loader
Image Preview
Search for Google images Google Image Icon
Select a recommended image
Upload from your computer Loader
Image Preview
Search for Google images Google Image Icon
Select a recommended image
Upload from your computer Loader

Email Sent
We have sent an email to your address "" with instructions to reset your password.