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THE POWER OF INTEREST

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**DAVE RAMSEY'S INVESTMENT CALCULATOR**

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

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**What are some items you may loan to a friend?**

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**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.

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**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?

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**“HE WHO HAS THE Gold---Rules!”**

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**Double A Penny For One Month—How Much At End?**

“I do not believe Dave Ramsey’s claim.” Go to Excel

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**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

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

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**Add $2,000 starting with a $100 investment**

E1 Title Add $2,000 per year E2 Type 100 E3 = (E2 * 1.05)

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**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

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The amount of money either being borrowed or saved A %, that will need to be converted into a decimal The amount of time in years Compound Interest A =P(1.

The amount of money either being borrowed or saved A %, that will need to be converted into a decimal The amount of time in years Compound Interest A =P(1.

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