Tuesday, September 28, 2010

Power of compounding

What would rather get: $1,000,000 in cash or $1 doubled every day for 30 days?

Many people automatically think the million dollars is the better offer until they do the math.
One dollar, doubled every day, for 30 days, is over $530 million! Staggering isn't it?
Albert Einstein is quoted as saying, "The most powerful force in the universe is compound interest."
Now imagine, the average home in Ottawa compounds by over 6% annually.  The results are staggering, the average house in Ottawa will double every 12 years.  The average house in Ottawa is now about $330,000, so in twelve years, that house will likely be worth $660,000

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