We’ve heard the stories of how compound interest can be your best friend. But did you know it can also be your worst enemy? We break down this financial concept in our latest episode of Making Cents of Money!
Show Notes:
• Compound Interest Calculator: https://www.investor.gov/financial-tools-calculators/calculators/compound-interest-calculator
• The Life-Changing Magic of Compound Interest: https://www.forbes.com/advisor/investing/compound-interest/
• Understanding Credit Card Interest: https://www.investopedia.com/articles/01/061301.asp
• Relevant articles from the Consumer Financial Protection Bureau:
o What is the difference between paying interest and paying off my principal in an auto loan?: https://www.consumerfinance.gov/ask-cfpb/what-is-the-difference-between-paying-interest-and-paying-off-my-principal-in-an-auto-loan-en-845/
o How does my credit card company calculate the amount of interest I owe?: https://www.consumerfinance.gov/ask-cfpb/how-does-my-credit-card-company-calculate-the-amount-of-interest-i-owe-en-51/
o What’s the difference between a simple interest rate and a precomputed interest in an auto loan contract?: https://www.consumerfinance.gov/ask-cfpb/whats-the-difference-between-a-simple-interest-rate-and-precomputed-interest-in-an-auto-loan-contract-en-841/
o What is the difference between an interest rate and the Annual Percentage Rate (APR) in an auto loan?: https://www.consumerfinance.gov/ask-cfpb/what-is-the-difference-between-an-interest-rate-and-the-annual-percentage-rate-apr-in-an-auto-loan-en-733/
• Interest Rate vs APR: What’s the difference?: https://www.investopedia.com/ask/answers/100314/what-difference-between-interest-rate-and-annual-percentage-rate-apr.asp
• Time Value of Money Explained with Formula and Examples: https://www.investopedia.com/terms/t/timevalueofmoney.asp
