# THE POWER OF INTEREST.

## Presentation on theme: "THE POWER OF INTEREST."— Presentation transcript:

THE POWER OF INTEREST

DAVE RAMSEY'S INVESTMENT CALCULATOR

Interest is the fee for the use of money over time.

What are some items you may loan to a friend?

What is the opportunity cost when loaning something to someone else?
The owner does not get to use the item for a period of time.

Interest is paid by a borrower and received by a lender or a saver.
A saver is paid when they allow a borrower to use their money for a period of time. Interest is paid by a borrower and received by a lender or a saver. Who pays interest? Who receives interest?

“HE WHO HAS THE Gold---Rules!”

Double A Penny For One Month—How Much At End?
“I do not believe Dave Ramsey’s claim.” Go to Excel

simple interest A1 Type the word Simple A2 Type in 100 A3 = A2 + 5
Paid on the amount of the original investment and does not change over time. A1 Type the word Simple A2 Type in 100 A3 = A2 + 5 Drag

compound interest Paid on the amount of the original investment and all accrued interest. C Type Compound C Type C = C2 * 1.05

Add \$2,000 starting with a \$100 investment
E1 Title Add \$2,000 per year E2 Type 100 E3 = (E2 * 1.05)

Rule of 72 How many years to double your money?
Divide 72 by the Interest Rate Interest rate is /4 = 18 years. Interest rate is /18 = 4 years