Power of Compound Interest

Compound Interest

Hi friends, in this article I will be telling you about Power of Compound Interest, you all might have heard the famous saying “Hard Work Pays” but does it really?

If we start to analyze this saying then we can see some live examples today.

Example: A maid, labor, auto rickshaw driver does that really pay them off? But I say hard work doesn’t always pay, I believe in “Smart Work”.

Ok, now let’s understand what “Smart Work” actually means?

If we “Achieve More in Less Time” only then we call it as “Smart Work”.

So what smart work actually means?

Education is one thing in which we grow our knowledge & skills that means basically we are using the power of our brains, here additionally we need to have an understanding of the concept of managing of money

In our daily life, we see peoples who are very intelligent but not so rich

Likewise, we also see people who are not so intelligent but they have a very good at managing money

So what is that we have to understand about money?

If you all understand the “Power of Compounding” then it means you somewhere have the understanding of money & you know the magic of the power of compounding & Compound Interest.

So in this article, I will give you a brief understanding of money & let you know the Power of Compounding & Compound Interest

If we implement at least a little bit of it in our life then maybe there will be no need for us to work for money instead money will start working for us.

Yes, it is absolutely true…!

Power of Compounding & Compound Interest

Let start to understand the concept of “Power of Compounding” with a small story

KingOnce upon a time, there lived a king who was very open-hearted and his promises were his priority and believed in fulfilling his promises no matter what

PoetMeanwhile, a very smart Poet meets the king and impress the king with his poems

The impressed king who was playing the chess tells the Poet to ask him for any wish which the king will fulfill it at any cost, looking at the opportunity the smart Poet tells the I don’t need much from you except some rice grains

The king asked him how much rice grains do you want?

The smart Poet asks to put 1 grain on each chess blocks & keep doubling & just give me the grains which are accumulated on the last block.

Power of Compound Interest

Hearing this the King laughs out loudly and say such a simple wish and say fine your wish is granted 🙂

Now we all think what is the big deal in it..?

The Poet has just asked for some small amount of rice grains but we are actually wrong..!

The big calculation is involved in this is not as simple as we think

Compound Interest Calculation Formula

If we keep doubling the grains in each block that is with the Compound Interest Calculation Formula: 2^n-1

This comes up with 2^63-1 let us now try to understand with Compound Interest Calculation Formula: in below calculation

Sacks of rice

2^63 = 2^32 X 2^31
= 429 Crores X 215 Crores
= 92235×10^14 Total Grains

1kg Rice = 50000 grains

= 92235×10^14 / 50000 kgs
1.84×10^14 kgs


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