Directories Search Admissions Calendar Home
University of Maryland      
Welcome to the Office of Student Financial Aid
Office of Student Financial Aid
  • Financial Literacy
    • What is Financial Literacy
    • Is Financial Literacy Important?
  • Videos to View
  • Financing College
    • Investing in Your Future
    • Applying for Financial Aid
  • Budgeting
    • More Budgeting
    • College Budget
    • Saving Tips
  • Credit & Loans
    • Credit Cards
    • Loans
    • Credit Report
    • Credit Score
    • Managing Debt
  • Safety
    • Identity Theft
    • Consumer Protection
  • Long Term Financial Planning
    • Saving
    • Interest
    • Power of Compound Interest
    • Investing
  • Other Resources
  • Contact Us
  

The Power of Compound Interest

How does compound interest work and why is it so powerful?

Remember the popular algebra problem using a checkerboard where you put a penny on square one, two pennies on square two, etc. Every checkerboard square is double the previous square. Because the checkerboard has 64 squares, you would need 18446744073709551615 pennies to fill the entire checkerboard!

Compound Interest is powerful because your previous interest gets to earn interest.

 
 
Send web site feedback to OSFA Webmasters
Last modified: Thursday, 12-Mar-2009 13:38:00 EDT