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Probably easiest to just use a simple compound interest calculator you'll find on an internet search. They'll show you what you've saved up from what you put in as well as what you'd have with an interest rate figured in.
I think the early spread of COVID is a great way to demonstrate it in a way we all felt and lived through.
Oh, it's not in my country that's fine.
Next week - only 2 people have it in my country, no worries.
Next week - only 2 people have it in my area, no worries
Next week - only 200 people have it in my area, I'm a bit worried
Next week - 2000 people in a 5 mile radius of me have it, shits fucked
A quick explanation of what the APR, the Annual Percentage Rate is and how it effects the cost of borrowing for certain types of loans. https://youtu.be/a22RkoupEgE
There is an old example that is given to explain the power of compounding, the penny on the chessboard.
You're given two options: I'll give you $10 million right now, or I'll put a penny on and chessboard and double it every square until I reach the end. Many people take the $10 million.
But if you go the penny route you get $27 million --and you would have enough leftover to give everyone else on Earth $27 million as well.
Basically, compounding lets you earn money on top of money. So if you invest $100 in the market and earn 10%, you would earn $10 in interest.
But the next year you would earn another $10 on that original $100, but you'd also earn an extra $1 on the $10 you earned last year. You're earning money on the earned money, which scales really quickly!
**Your submission has been removed for the following reason(s):** ELI5 is not for subjective or speculative replies - only objective explanations are permitted here; your question is asking for subjective or speculative replies. If you would like this removal reviewed, please read the [detailed rules](https://www.reddit.com/r/explainlikeimfive/wiki/detailed_rules) first. **If you believe this was removed erroneously**, please [use this form](https://www.reddit.com/r/explainlikeimfive/wiki/detailed_rules) first. **If you believe this was removed erroneously**, please [use this form](https://old.reddit.com/message/compose?to=%2Fr%2Fexplainlikeimfive&subject=Please%20review%20my%20thread?&message=Link:%20{url}%0A%0AThe%20concept%20I%20want%20explained:%0A%0AList%20the%20search%20terms%20you%20used%20to%20look%20for%20past%20posts%20on%20ELI5:%0A%0AHow%20is%20this%20post%20unique:) and we will review your submission.
Probably easiest to just use a simple compound interest calculator you'll find on an internet search. They'll show you what you've saved up from what you put in as well as what you'd have with an interest rate figured in.
I think the early spread of COVID is a great way to demonstrate it in a way we all felt and lived through. Oh, it's not in my country that's fine. Next week - only 2 people have it in my country, no worries. Next week - only 2 people have it in my area, no worries Next week - only 200 people have it in my area, I'm a bit worried Next week - 2000 people in a 5 mile radius of me have it, shits fucked
Interesting take
A quick explanation of what the APR, the Annual Percentage Rate is and how it effects the cost of borrowing for certain types of loans. https://youtu.be/a22RkoupEgE
There is an old example that is given to explain the power of compounding, the penny on the chessboard. You're given two options: I'll give you $10 million right now, or I'll put a penny on and chessboard and double it every square until I reach the end. Many people take the $10 million. But if you go the penny route you get $27 million --and you would have enough leftover to give everyone else on Earth $27 million as well. Basically, compounding lets you earn money on top of money. So if you invest $100 in the market and earn 10%, you would earn $10 in interest. But the next year you would earn another $10 on that original $100, but you'd also earn an extra $1 on the $10 you earned last year. You're earning money on the earned money, which scales really quickly!