>> What is the power of compounding interest?

Definition of compound interest:

"Interest that accrues when earnings for a specific period are added to principal; thus interest for the following period is computed on the principal plus accumulated interest.

Compound interest arises when interest is added to the principal, so that from that moment on, the interest that has been added also itself earns interest. This addition of interest to the principal is called compounding."

It means you don’t withdraw the interest earned from you capital. Just let the return stay in your investment account and let it compounds. Your next interest return will be calculated using the accrued principal plus interest.

Let's say, you invest RM1,000 in any investment giving you 10%* interest return per annum. Provided that you don’t withdraw any sen from the account, your account balance will look like Table 1 below:

*Nilai pulangan  tersebut hanyalah anggaran tidak mempengaruhi nilai prestasi pulangan mana-mana dana  sebelum dan selepas.

Jadi, begitulah sedikit sebanyak tentang compound interest. Bayangkan sekiranya anda melabur selama 30 tahun dengan modal permulaan RM1000.00 sahaja maka baki simpanan/pelaburan yang terhasil ialah sebanyak RM17,449.40.

Bagaimana pula kalo anda menggunapakai kaedah Compound Interest & Ringgit  Cost Averaging? Hasilnya pasti akan lebih mengkagumkan.

Apa yang kita rancang dan lakukan hari ini adalah untuk hasil dimasa akan datang. 

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