What is compounding how does compounding affect your savings

Assignment Help Accounting Basics

Reference no: EM133363405

Question: This week we are discussing savings and depository and non depository institutions that help us to save our money.

What is compounding?
How does compounding affect your savings?
If you were to save $1000 a year for the next 20 years, at an interest rate of 5%, how much money would you have in 20 years? Please show your math. How much interest will you earn in that time period? Please show your math.
If you were to save $2000 a year for 10 years, at an interest rate of 5%, how much money would you have in 10 years? Please show your math. How much interest will you earn in that time period? Please show your math.
Given the information in the primer and in our text, do you think you will try to start saving early in life, and why?

Reference no: EM133363405

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