The first part of the sum gives a result of 1.067.. To convert this to a %age increase,minus 1 to get .067 then multiply by 100 to get 6.7%I more or less understand the concept of compound interest but I look at this thread and it becomes more clear to me why I didn't ever really "get" investing. Maybe I shouldn't have given up honours maths when I got to 5th year after all!
Anyway, I can kind of follow the above but why the minus 1 in the equation? Sorry to be asking what might be obvious to the less mathematically challenged.
I bought shares in Vanguard Index in June 2006 for $3000. Those shares are now worth $5000. Does anybody know a formula that I can use to calculate:
1. Total interest accumulated over the total period
2. Interest accumulated per year (per year over a period of 8 years)
Thanks.
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