SO WHAT IS COMPOUND INTEREST IS SO IMPORTANT?

To put it simply, compound interest is the interest generated from the initial capital and added to the capital, then the total capital generates interest, then the new interest is added to the capital and this new total capital generates interest. Continue like that for a long time, sometimes up to a dozen or a few decades.


Inside:
  • FV: the future value of the investment
  • PV: the present value of the investment
  • i: interest rate per period
  • n: number of periods
Thus, it can be seen that 3 variables that strongly affect the future value of our investment are initial investment amount, investment interest rate, and duration (number of periods).

THE " TERROR " OF COMPOUND INTEREST

For example, we put in trading and use the interest rate that many brothers consider "stork" in the original example is 3-6% 1 month then try to see how much we have 10 years later.
  • If it is 3% then after 10 years 1000 USD => 34.710 USD.
  • If it is 6% then after 10 years 1000 USD => 1.088.187.75 USD
The trick here is that, when the capital we grow up with the initial period interest, the interest rate on that "big" capital will make it grow even more quickly

EPILOGUE

The problem is not making a lot of profits but earning steadily and sustainably, that is the difficult thing.