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THE POWER OF INTEREST

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.

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THE POWER OF INTEREST

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  1. THE POWER OF INTEREST

  2. DAVE RAMSEY'S INVESTMENT CALCULATOR

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

  4. What are some items you may loan to a friend?

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

  6. 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?

  7. “HE WHO HAS THE GOLD---RULES!”

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

  9. simple interest • 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

  10. compound interest • Paid on the amount of the original investment and all accrued interest. • C1 Type Compound • C2 Type 100 • C3 = C2 * 1.05

  11. Add $2,000 starting with a $100 investment • E1 Title Add $2,000 per year • E2 Type 100 • E3 = (E2 * 1.05) + 2000

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

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