Jump to content

- - - - -

What Is Compound Interest?

4 replies to this topic

#1 status - Fair thee well

status - Fair thee well
  • Guests

Posted 11 March 2018 - 11:21 AM

Compound interest is one of the most powerful forces of investing. Here's how to calculate it.

When it comes to calculating interest, there are two basic choices: simple and compound. Simple interest simply means a set percentage of the principal every year, and is rarely used in practice.

On the other hand, compound interest is applied to both loans and deposit accounts. Compound interest essentially means "interest on the interest" and is the reason many investors are so successful.


Where does the formula (1+rn)n for compound interest come from?

As for history, "interest on interest" is much older than middle ages, much much older. It is mentioned, along with sample calculations, on Babylonian clay tablets dated to c. 2000–1600 BC. Although there are no compounding cycles of less than a year on the tablets there is one where the interest is compounded once in five years, and scribes already appear to make the "mistake" of adding up annual 20% to five year 100%. More likely the agreement was directly that the amount doubles in five years since fractional time explicitly appears in calculations (there are no formulas of course). See Muroi's Oldest Example of Compound Interest in Sumer (p.7), who also argues that the use of compound interest can be traced to even earlier, c. 2600–2350 BC. Interestingly enough, compound interest was condemned by Aristotle as "usury", and mostly banned in the Christian world during middle ages.


The oldest example of compound interest in Sumer

In many modern countries – except Islamic –compound interest is used to compute interest on a loan, and plays an important role in banking and finance. The compounding of interest, which is often described as “interest on interest”, is occasionally considered to be one of the greatest inventions by human beings, although a high rate of compound interest can cause serious social problems.


  • 0

#2 status - Knightfall

status - Knightfall
  • Guests

Posted 11 March 2018 - 11:37 AM

I'm wondering if the Templars charged a simple fee or did they charge interest on the interest too?

  • 0

#3 status - Wildwood Weeds

status - Wildwood Weeds
  • Guests

Posted 11 March 2018 - 11:41 AM

Apparently the compounded interest philosophy keeps accumulating to the point of never being able to pay back the debt. Ever! It seems more than just usury, but an invisible system of slavery...



  • 0

#4 status - Guest

status - Guest
  • Guests

Posted 11 March 2018 - 12:25 PM

Could the Sapphire stick mentioned in Jasher be related to a Tally stick or a Measuring rod?

Fruits from tilling the soil and the fair distribution thereof?

Book of Jasher, Chapter 77

42 And this is the stick with which all the works of our God were performed, after he had created heaven and earth, and all the host of them, seas, rivers and all their fishes.

43 And when God had driven Adam from the garden of Eden, he took the stick in his hand and went and tilled the ground from which he was taken.

44 And the stick came down to Noah and was given to Shem and his descendants, until it came into the hand of Abraham the Hebrew.

45 And when Abraham had given all he had to his son Isaac, he also gave to him this stick.

46 And when Jacob had fled to Padan-aram, he took it into his hand, and when he returned to his father he had not left it behind him.

47 Also when he went down to Egypt he took it into his hand and gave it to Joseph, one portion above his brethren, for Jacob had taken it by force from his brother Esau.

48 And after the death of Joseph, the nobles of Egypt came into the house of Joseph, and the stick came into the hand of Reuel the Midianite, and when he went out of Egypt, he took it in his hand and planted it in his garden.

49 And all the mighty men of the Kinites tried to pluck it when they endeavored to get Zipporah his daughter, but they were unsuccessful.

50 So that stick remained planted in the garden of Reuel, until he came who had a right to it and took it.

51 And when Reuel saw the stick in the hand of Moses, he wondered at it, and he gave him his daughter Zipporah for a wife.


  • 0

#5 status - Guest

status - Guest
  • Guests

Posted 11 March 2018 - 02:28 PM

The sun-god Shamash holding a ring of coiled rope and a rod

  • 0

Reply to this topic


Similar Topics Collapse

IPB Skin By Virteq