History Of The Compound Interest

History Of The Compound Interest The history of compound interest goes back thousands of years, at least to Babylon, the traditional for Israel. What compounding means is the adding of accumulated interest back to the principal so that interest is earned on interest from that moment on (Wickipedia; the peoples dictionary). This is far different than simple interest, which means that the principle remains separate from the interest, which is paid to the creditor at various intervals, and so is not added to the principal amount. In other word, compound interest is when you put your money in a bank, you will normally receive interest. Interest is a percentage received on the invested amount for a period of (usually) a year. Principal for compound interest: For example, say you invest RM1000 in a bank for 5 years at 5.00% interest per annum As you can see, your balance at the end of 5 years, using compounding is RM1276.30. However, if the simple interest calculation is used, you would only receive RM1250.00 at the end of 5 years. So basically, compounding allows the interest you receive at the end of each year to generate more interest for the following years of your investment period thus enhancing your total returns. Formula: When the interest is compounded once a year: A = P(1 + r)n However, if you borrow for 5 years the formula will look like: A = P(1 + r)5 This formula applies to both money invested and money borrowed. Frequent Compounding of Interest: What if interest is paid more frequently? Examples of the formula: Annually = P ? (1 + r) = (annual compounding) Quarterly = P (1 + r /4)4 = (quarterly compounding) Monthly = P (1 + r /12)12 = (monthly compounding) P = the principal (the initial amount you borrow or deposit) r = the annual rate of interest (percentage) n = the number of years the amount is deposited or borrowed for. A = the amount of money accumulated after n years, including interest. Compound interest from Malaysian perspective. This time I want to show a newslater I subscribe from the young Malaysian millionaire mr. Irfan Khairi. He tells about the power of compound interest when we had saving. Compound Interest is the most important tool that gives rich people in the world. The key is, can start saving as early as even a little, and discipline to keep the consistency. What is interesting here is where we select our saving store to provide high returns, the next great compound interest would be more shown again. He mentioned about the stores that can provide returns of 12% per year is, I is not no other a mutual fund or unit trust. Now in Pakistan, returns 12% is quite normal if you research the companies Mutual funds. Please read newslater the power of compound interest to know. The compound intereset is not how do people get rich easier but it is how to make sure people get rich. Wanted to know what way? Let me explain with a better viewer Imagine a baby when born, every day, his/her mother put RM1.00 to the fund for the baby, of dollars daily. Its a total of RM30 per month. Year, the amount to RM365. Continue into the reserve fund and when the baby was aged 40 years, the amount contained in the fund is RM14, 600. Money saved is not growth. Perhaps the funds used to upgrade to a larger fund. But, lets face it RM14, 600 from the storage for 40 years is not a large amount. Now, imagine if the money is stored in the storage unit yields of 12% per annum interest and RM1 in store every day since birth. Money should only RM14,600, now RM352, 943.18 after 40 years. RM352, 943.18? Where it came from the RM338, 343? This is the answer to the question of how to become rich for sure. Addition of RM338, 343 is coming from the compound (Compound Interest). Compound Interest is the most important tool that gives rich people in the world. Elbert Einstein was question of the compund Interest. Answers given by him is very easy. He said the compound interest is the greatest Invention of all time. Of course my example of the baby in the not quite logical. How much is a mother can enter RM1 each day until the baby is 40 years of age. However, my example is to show that the small savings that we, if invested in the long run, it will be great! I have contacts who know to take advantage of interest compounds. They are husband and wife simple. Husbands income is RM2,500. Wife income is RM2,500. They live modestly and not wasteful. So, to cover all expenses paid by husband-living homes, cars, food and drink and all the requirements for payment by the husband. Meanwhile, the wife of the store to pay the storage unit yields 12% (now in Pakistan, returns 12% is quite normal if you research the companies Mutual funds). A couple is actually in the road that will lead them to become millionaires. On how? Save RM2,500 per month and given 12% returns on their savings, they say start at the age of 25 years (married young). Before they reach 45 years of age and get wealth, amounting to RM2,473,138.41. Yes, almost RM2.5 million. And this is the only think that kept wages wife could not go up for 20 years. A couple achieved millionaire status in 38 years of age. All of this is the power of compound interest. If you are not excited by these figures, let me explain more about the kompound interest and the interest compounds the key to success. The key to interest compounds. That is, start by quickly. If you delay starting your savings, interest kompun delayed effects. The answer is very simple, infact, it is no longer a secret because in any personal finance books in the world, surely there is a telling chapter in this way. Means that 100% if used will make us millionaires. Yes, you too can become millionaires if this manner. No matter our background, no matter the level of intelegent us, no matter what our expertise, there is a way to be sure that someone is a millionaire. However, not many people really take advantage of this because of Islamic Religion especially forbidden to do so. The Quran explicitly mentions compound interest as a great sin. Usury (oppressive interest), known in Arabic as riba, is considered wrong. Compound interest from others perspective. Several writers I studied traced the concept of compound interest to the Sumerians, whose empire included fabled Babylon. Could it be that compound interest and its questionable value is another gift to us from Babylon, the kingdom and system against which God declares eternal vengeance? Although Jubilee justice of the Bible allows no interest to be charged to fellow Israelites, there may be some cases where reasonable simple interest is both just and necessary. Economists use the term opportunity cost to describe the cost of other lost opportunities when money is devoted to one cause, such as making loans. So perhaps a low amount of simple interest would reward one for using money to make a loan rather than spending it upon oneself. And theres the additional element of risk, which also needs reasonable compensation. But never should interest be charged on funds loaned to the poor for their subsistence, nor should unpaid interest be used as a reason for foreclosure on productive assets or personal dwellings. Our legal system generally protects moderate home equity from loss in bankruptcy cases, but not against foreclosure due to lapsed mortgages. Why not? The effect of compound interest Weve all seen articles on the wonders of compound interest. But most of us dont have large sums of money just lying around waiting to be invested wisely. So were going to see how us poor folks can apply compound interest to make a difference in our lives. Time and compound interest, however, are a double edged sword. That 14% interest youre paying on your credit card debt is actually much higher if you figure in compound interest. now lets get down to how us poor folks can take advantage of compound interest. Could you find a way to save RM5 per month? Maybe skip lunch at McDonalds or rent fewer videos each month. If you drive a lot you might save 2 gallons of petrol by getting rid of the extra weight in the trunk of your car. Maybe send a couple of handwritten notes instead of greeting cards. If you look and you really want to, youll probably find some way to save that $5 each month. But, at that rate itll take forever to save anything. Well, lets see. If we save RM5 per month, earn 5% interest compounded monthly and continue to do that for 10 years whatll we save? Well, well have saved RM600 (120 x 5). But the account will be worth RM776. Thats enough for a purchase or repair bill. You do not understand and have credit card debts. We people cannot save money. Oh, but youre wrong my plastic using friend. Lets suppose you take that RM5 per month and add it to your credit card payment. Youll actually do better than the saver. Lets assume that your credit card interest rate is 14% annually. After ten years youll have paid off an additional RM1,315 in credit card balance. More time magnifies the effects of compounding. Lets say you put some money away today at 5% interest. That money will double in about 14 years. If you left the interest in the account youd have twice as much money earning interest in years 15 through 28. Its like you were getting 10% interest on your original savings. By year 29 youll be earning 20% interest on your original savings! The rest of the account will earn a less depending upon how long its been in the account. Another great mind of the Twentieth Century, the philosopher and theologian Alfred North Whitehead, believed that everything in the universe is constituted by its relationships to other things. Whitehead is the source of what has come to be known as process thought. In addition to an intensity differential, there is another difference between simple and compound relationships. If my identity is constituted by my relationships, I need to take other people and other things seriously. In part, they make me who I am. Simple relationships are those in which I deny this fundamental reality and act like everything is about me. Compound relationships, on the other hand, are ones in which I recognize the truth: my life is indeed about me, but its also about other people and other things as well. Value comes from relationships that are both substantial and reciprocal. In terms of our everyday experience, simple relationships focus only on how useful or obstructive others are to helping us get what we want. Each person in our lives has a functional role: customer, sibling, competitor, parent, employee, investor, teacher, friend, boss, teammate, or subordinate. We also view the elements of the natural world in an instrumental way: air is to breathe, water is to drink, land is to develop, trees are to harvest, oil is to drill for, and crops are to engineer. When our national interest is defined one-dimensionally, other nations are either with us or against us, friend or foe, loyalist or traitor. The problem with this approach is that it severely limits the value we can create. This has become painfully clear to our nation in recent months. We are learning the hard way that much of what happens in the world is not about us and what we want. If democracy eventually comes to Iraq, it will come because the people of Iraq long for it, not because our military insists on it. Our mistake as a nation is not that we want freedom from tyranny for the Iraqi people. Our mistake is in believing that our view of things is the only one that must be taken into account. I am deeply troubled by the disdain for human dignity shown in the Abu Ghraib prison. But I am also troubled by how those actions mirror with appalling clarity our wide-ranging disdain for other interests and other points of view. Value comes from relationships that are substantial and reciprocal. We will always be better off when we understand the truth: our interests are compound.

The Other Side of Truth

‘The Other Side of Truth’ is a novel written by author, Beverly Naidoo. The novel is mainly based on telling the truth and lying, and when it is right to do either. In the book are various types of situations where characters need to make a decision on whether to lie or to tell the truth. Beverly Naidoo provides the correct decisions and the wrong ones in the story. Naidoo shows in the novel, when it is ok to lie and when it is not. Naidoo suggests that if your life is in danger it is considered ok to lie, but if you assume your life is still in danger when it’s actually not you might accidently lie to the wrong people.Naidoo displays this when Sade and Femi find the father in a detention centre and ask him why he is not able to come back home with them. Folarin says that he cannot because Sade lied about who they were to the officials. Now the officials do not believe Folarin when he says that they are his kids. There is a sthrong message that sometimes one lie i s ok in the right circumstances, but consecutive lies could end you up in a lot of trouble. An important quote from the book states this idea, â€Å"A lie has seven winding path, the truth has one straight road. pg. 148. Lying could be a very dangerous thing, telling the truth is the best way to go, but even the truth can land you in trouble. The truth is a very powerful thing, it is important that you tell it, this is portrayed by Naidoo in her novel. Naidoo has based the whole novel around the truth. In the story it is used when it should and shouldn’t be. Folarin Solaja is the main protagonist in the novel when it comes to the importance of telling the truth. He states several quotes about how important in his mind, it is to tell the truth.

12 Angry Men by Talita E. Sigillo

Based on the movie  «12 angry men » In the movie  «12 angry men », one can explore a variety of fallacies and generalizations. Each juror except for one comes in with a verdict of  «Guilty », but by using critical thinking the reasons to support their claim are dismissed one by one. Except for Juror number three who is the last one to change his verdict. He disregards all critical reasoning and sticks to his initial claim using multiple fallacies to support it.He is clearly prejudiced towards the defendant no mater the evidence brought forward to him. Only at the end does he realize that all this time he was seeing his own son in the eyes of this boy, a son that had  «disrespected » the father. Him. Following are only some of the multiple fallacies juror number three used to support his claim. One of the very first fallacies juror number three uses is  «begging the question.  » This is when one states an opinion as though it is a well known fact. When he first ent ers the room he claims  «everyone knows he is guilty!! and when asked by the critical thinker to explain the reasons for his claim the juror answers:  «everything Says he is guilty » by using this reason he again is  «begging the question » and simultaneously uses  «Circular reasoning » since he restates his claim as though it is reason. Moreover when analyzing the two testimonies, the critical thinker finds ways to prove that there is a reasonable doubt in the two witnesses testimonies. Again juror number three uses more than one fallacy to claim that he has no reasonable doubt.It was brought to their attention that the woman who testified that she had seen the boy kill the father couldn’t actually see someone clearly. This claim was supported with the following reason and train of thought: The glimpse of the murder was seen through her bedroom window, the window of the moving train, across the street and through the victim’s apartment window.  «Could, who the woman saw commit the murder, be someone else »? Juror number three claimed that the  «woman testified in court » and also said  «The woman said she saw him » and finally ended with  «the woman saw it! After reasonable doubt to the testimony is applied, juror number three used the above quotes as his reasons to support his claim that it was the boy that the woman saw, concluding with evidence that do not follow through with his claim and thus being  «non sequitor ». Juror number three still had a valid reason to believe the boy had committed the murder since the man’s testimony was that he heard the boy shout out the phrase  «I’m going to kill you!  » to his father and that the old man who testified in court, saw the boy running down the stairs and that he heard the body fall.Through critical thought and analysing the evidence piece by piece, it was pointed out that, since the murder took place during the passing of a train, the old man coul d not have possibly heard the body fall and that it took him too long to cross his room and open the door for him to have seen the boy after committing the murder. Still juror number three voted guilty saying he had no reasonable doubt that  «the boy said ‘I’m going to kill you’ and he killed him » at this point he was using circular reasoning, restating his claim as a reason.It was at this point that the critical thinker decided to prove his point to juror number three, he provoked him so much to the point that he said  «I’m going to kill you!!  » to the other juror who provoked him, it was brought to his attention that a lot of them could have  «criminal tendencies » like the boy, but having them did not mean acting upon them. It was then that juror number three started loosing control. All the reasons he was using to mask the truth about why he was convicting the boy had been questioned leaving him with no logical warrants to support his cla im of guilty.When questioned again  «what proof do you have that the boy is guilty?  » he answers with a  «Red Herring » that he is  «entitled to his opinion » By the end of the movie his true premise behind the verdict of guilty was came to the surface. Juror number three had a son that had gotten in an argument with him and had stopped talking to him. This, according to the values in which the juror was raised, was disrespect and disrespect was inexcusable towards the father.It was obvious, that he prioritized respect to the father above everything else, when he said  «It doesn’t matter what his father did it’s his father and you can’t say ‘I’ll kill you’ to you father!  » This value that he prioritized along with the incident with his son was what had clouded his judgement and affected his point of view. Juror number three was therefore unable to critically look at the evidence presented since he was prejudiced towards the boy. For Juror number three the boy was guilty to begin with for disrespecting his father witch is this Jurors highest value.

Analysis Of The Article Balancing The Books - 1172 Words

In the past, the act of â€Å"balancing the books† involved hammering through countless accounting records and ledgers, anticipating that debit entries will equal to credit entries. In current times â€Å"balancing the books† is much more complex as we have electronic databases that are housing financial data and computer software that is computing the financial data for multi-national companies, worth billions of dollars. The current state of the global economy makes it possible for an investor in Germany to electronically manage their financial portfolio in California. It also allows an individual in Baltimore to operate a business in Nigeria. While globalization has been beneficial to businesses around the world, it has created opportunities for illegal behaviors to manifest. Specifically, white-collar criminals are exploiting the weaknesses in internal controls of corporations for financial gain. Subsequently, the field of accounting has received more attention i n recent years due in part to the increase in high profile, white-collar crimes involving the accounting practices of large corporations such as the Adelphia, Enron, and WorldCom debacles in the early 2000’s. The Association of Certified Fraud Examiners (ACFE) estimates that occupational fraud losses cost organizations $994 billion annually (â€Å"Report to the Nation, 2014). The accounting scandals, the growing occurrences of occupational fraud and the changing needs of the legal society are the driving force behind anShow MoreRelatedCase Analysis : Whole Foods1011 Words   |  5 PagesCase Analysis 2 Whole Foods Analysis Whole Foods is one of the largest organic food stores in the industry. During the years of 2007 – 2008, the company has been undergoing criticism and reluctance from the customers and the employees. 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