Search
Vocabularying
Listening
Reading
1. Academic
2. General
Writing
1. IELTSWriting Checker
2. IELTS Writing Samples
Speaking

Do you want to improve your writing? Try our new evaluation service and get detailed feedback.

Value of compound interest

Value of compound interest yDRb3

What if I tell you by just investing 500 rupees per month for the next 20 years you can more than 30 lakhs rupees(with 10 per cent return). Would you believe it? This is called compound interest. Compound interest is the interest on a deposit calculated based on both the initial principal and the accumulated interest from previous periods. In simple words, money making money for you. So your investment would be 1. 2 lakhs for 20 years but your returns are way higher than your investment. BUT WHY IS IT IMPORTANT? Compound interest causes your wealth to grow faster. It makes a sum of money grow at a faster rate than simple interest because you will earn returns on the money you invest. In the current world where inflation is booming at 6-7 per cent, compound interest is a way to overcome the expenditures. Moreover, in India people tend to save their income. But looking at the current scenario savings are only giving losses to a person. For instance, if a person saves 100 rupees, they will end up at 94 rupees because of inflation. On the other hand, if that person invests their money, they will get around 10 per cent of returns. Secondly, the more time, the more growth potential. Compound investment requires a lot of patience and discipline. The more we when put the better it gets. For example by starting investment at the age of 20 for the next 20 years and by not touching that money for the next 20 years, you have already secured your retirement plan.

What if I This phrase/word (depending on the context) can be potentially replaced with :inform
tell
 you by This phrase/word is too simple and can be replaced with:merely
just
 investing 500 rupees per month for the next
 20 years you can more than 30 lakhs rupees(with 10 per cent return). Would you believe it?

This is called
 compound You use this word too often, consider replacing it withimportancesignificancesympathypassionactivityenthusiasm
interest
. Compound You use this word too often, consider replacing it withimportancesignificancesympathypassionactivityenthusiasm
interest
 is the You use this word too often, consider replacing it withimportancesignificancesympathypassionactivityenthusiasm
interest
 on a deposit calculated based on both the initial principal and the accumulated You use this word too often, consider replacing it withimportancesignificancesympathypassionactivityenthusiasm
interest
 from previous periods. In simple words, You use this word too often, consider replacing it withsalarywagewealthpaybillcash
money
 making You use this word too often, consider replacing it withsalarywagewealthpaybillcash
money
 for you. This phrase/word is too simple and can be replaced with:consequently
So
 your investment would be 1. 2 lakhs for 20 years This phrase/word is too simple and can be replaced with:on the contrary
but
 your returns are way higher than your investment.

This phrase/word is too simple and can be replaced with:on the contrary
BUT
 WHY IS IT This phrase/word is too simple and can be replaced with:vitalcriticalessential
IMPORTANT
?

Compound You use this word too often, consider replacing it withimportancesignificancesympathypassionactivityenthusiasm
interest
 causes your wealth to grow faster. It This phrase/word (depending on the context) can be potentially replaced with :createsconstructsmanufacturesproduces
makes
 a sum of You use this word too often, consider replacing it withsalarywagewealthpaybillcash
money
 grow at a faster rate than simple You use this word too often, consider replacing it withimportancesignificancesympathypassionactivityenthusiasm
interest
This phrase/word is too simple and can be replaced with:due to the factin light of the fact thatowing to the fact that
because
 you will earn returns on the You use this word too often, consider replacing it withsalarywagewealthpaybillcash
money
 you invest. In the This phrase/word (depending on the context) can be potentially replaced with :contemporarymodern
current
 world where inflation is booming at 6-7 per cent, compound You use this word too often, consider replacing it withimportancesignificancesympathypassionactivityenthusiasm
interest
 is a way to overcome the expenditures. Moreover
, in India This phrase/word (depending on the context) can be potentially replaced with :individualsnationsociety
people
 tend to save their income. This phrase/word is too simple and can be replaced with:on the contrary
But
 looking at the This phrase/word (depending on the context) can be potentially replaced with :contemporarymodern
current
 scenario savings are This phrase/word (depending on the context) can be potentially replaced with :exclusively
only
 giving losses to a person. For instance
, if a person saves 100 rupees, they will This phrase/word (depending on the context) can be potentially replaced with :expiration
end
 up at 94 rupees This phrase/word is too simple and can be replaced with:due to the factin light of the fact thatowing to the fact that
because
 of inflation. On the other hand
, if that person invests their You use this word too often, consider replacing it withsalarywagewealthpaybillcash
money
, they will This phrase/word (depending on the context) can be potentially replaced with :acquire
get
 around 10 per cent of returns.

Secondly
, the more time, the more growth potential. Compound investment requires This phrase/word is too simple and can be replaced with:a plethora ofa number ofnumerous
a lot of
 patience and discipline. The more we when put the better it This phrase/word (depending on the context) can be potentially replaced with :acquires
gets
. For example
 by starting investment at the age of 20 for the next
 20 years and by not touching that You use this word too often, consider replacing it withsalarywagewealthpaybillcash
money
 for the next
 20 years, you have already secured your retirement plan. 