This investment earns me 1% per month in interest! How much money can I make in a year, and how will I increase my interest earnings? You’ve come to the right place if you’re looking for answers to those questions.
Today, we’ll talk about the world’s 8th wonder — the force of compounding interest — as well as cryptocurrency.
In this article, we’ll talk about the world’s 8th wonder — the force of compounding interest — as well as cryptocurrency.
As Albert Einstein said: ”Compound interest is the 8th wonder of the world. He who understands it, earns it. He who doesn’t, pays it.”
What is compound interest?
Though not everyone has studied finance or accounting, compounding interest, simply means using the increased capital for the next interest cycle. In a nutshell, compound interest is interest on interest.
Does it seem to be complicated? Here’s an easy example:
We have an investment opportunity that pays us 1% per month, which will result in an annual return of 12%, which is simply the amount of the twelve months in a simple interest sense. It will get you $1000 a month and $12000 annually for a capital of $100000.
In the case of compound interest, however, interest will be measured not only on the basis of your principal, in this case $100,000, but also on the basis of this $100,000 plus the first month’s interest, totaling $101,000, beginning in the second month. As a result, beginning in the second month, you will earn 1% interest on a principal of 101000$ instead of 100000$, and so on as the months pass.
How to calculate the interest gain?
By using the following basic mathematical formula: K*(1+i)^n, where “K” represents your starting money, “i” represent your interest rate, and “n” represents the number of periods, in this case 12, (months).
Do you have a feeling of being overwhelmed? Allow yourself to unwind. We’ll try to make it as simple as possible. Let’s use the same example as before: When $100,000 is multiplied by (1 + the interest rate), a total of $12 is revealed. In numbers, this equals $100,000*(1+0.01)¹².
As a result of compound interest, your investment will be worth $112,682.5 at the end of the year.
The significance of the time frame
Since the impact of compound interest is exponential, the longer you leave your capital in a compound interest sense, the more miracles this process performs.
It’s important to play the long game in order to reap the full benefits of compounding interest. Patience is key. The more you let your curiosity compound, the sweeter it becomes.
Is it better if I go all in and then forget about it?
Can putting any of your portfolio assets into a crypto staking platform like SnapBots be the best solution? Although their staking strategy is lucrative, you can choose the amount of risk you want to take.
It’s important to evaluate your risk tolerance and capital allocation. This is why we recommend diversifying the portfolio rather than focusing solely on one staking strategy.
It’s important to evaluate your risk tolerance and capital allocation. This is why we recommend diversifying the portfolio rather than focusing solely on one staking strategy.
Conclusion
In the field of cryptocurrency, there are a lot of fear and greed, and it is a very volatile sector. Given these factors, it’s no surprise that the demand is highly emotional.
SnapBots conduct trades based on sophisticated trading algorithms with no emotions involved while SnapBots is acting on your behalf. Their prime goal is to assist investors in accumulating a nice profit over time.
However, crypto asset investing, trading, staking can be considered a high-risk activity. Please use your extreme judgement when making the decision to invest in, sell, or to stake Crypto Assets. This is Not Financial Advice.
