Problem of the Month - January 2011

Compounding interest is a very powerful concept. It can really hurt you, such as when you don’t pay off your credit card bill and the interest payment keeps getting bigger and bigger. It can also help you if you save money and manage it well enough to earn a steady return over many years. If you start with $1000.00, how much will this become after 10 years if the rate of return is 5%? Find out how to do this problem!.