The Motley Fool Discussion Boards

Previous Page  
Investing/Strategies / Retirement Investing 

URL:
http://boards.fool.com/justonecommentonthisgetting1permonthis11371020.aspx


Subject: Re: Pension figured into Networth???  Date: 10/14/1999 9:30 AM  
Author: Helter  Number: 14519 of 77870  
Just one comment on this: Getting 1% per month is better than getting 12% per year. 1.01 to the 12th power i.e. compound interest = 1.126825 or over 12.5% per year. If you are compounding over a long period of years  that 1/2 % can really add up. 1000 for 30 years at 12% per year = 29,959.92 1000 for 30 years at 1% per month = 35,949.64 So for each $1,000 in your calculation  you get a difference 30 years out of about $5,000 so rather than dividing your yearly interest rate by 12 to get monthly  take the 12th root of 1+the interest rate. In excel that's =1.12^(1/12) which comes out at 1.009489 so .9489% per month is 12% per year. Helter 

Copyright 19962015 trademark and the "Fool" logo is a trademark of The Motley Fool, Inc. Contact Us 