Investment

Invest, Invest, Invest !

There are many types of investments you can make. Let's concentrate more on the common investments found in this country, starting with the safest to the riskiest.  

1. CASH

Investments of such nature include savings accounts and fixed deposits.

The magic of compound interest.

We have all heard of bank interest, so what is the big deal about compound interest? A lot! First of all, what is compound interest? It is interest that earns interest.

For example, if you save RM100.00 with a bank earning an interest rate of 6% per year, after a year, your account will earn:

                                      Interest = interest rate x deposit

                                                       = 0.06 X RM100.00

                                                       = RM6.00

Now your original investment has become RM 100.00 + RM6.00 = RM 106.00. And suppose that new investment of RM 106.00 is deposited for another year at the same interest rate :

                                      Interest = interest rate x deposit

                                                       = 0.06 X RM106.00

                                                       = RM6.36                       

So your deposit has grown, it has become
 RM 106.00 + RM6.36 = RM 112.36.

This is so called Compound Interest.