https://www.explainxkcd.com/wiki/api.php?action=feedcontributions&feedformat=atom&user=192.139.231.5 2026-07-10T18:03:56Z User contributions MediaWiki 1.30.0 https://www.explainxkcd.com/wiki/index.php?title=947:_Investing&diff=35881 2013-05-01T16:33:19Z

<p>192.139.231.5: /* Explanation */ snopes link added</p> <hr /> <div>{{comic<br /> | number = 947<br /> | date = September 5, 2011<br /> | title = Investing<br /> | image = investing.png<br /> | titletext = But Einstein said it was the most powerful force in the universe, and I take all my investment advice from flippant remarks by theoretical physicists making small talk at parties.<br /> }}<br /> <br /> ==Explanation==<br /> {{w|Compound interest}} is a type of {{w|interest}} in which the interest earned is added to the total amount, so that the interest itself then begins to gain interest. This contrasts to {{w|simple interest}}, where the amount used to calculate the interest will always stay at a fixed value.<br /> <br /> There is an urban legend that Einstein said that compounding interest is the most powerful force. [http://www.explainxkcd.com/wiki/index.php?title=250 Snopes] has its [http://www.snopes.com/quotes/einstein/interest.asp doubts about it].<br /> <br /> ==Transcript==<br /> :Ponytail: Sure, 2% interest may not *seem* like a lot. But it's *compound*!<br /> <br /> :[Ponytail opens a computer and begins calculating]<br /> :Ponytail: If you invest $1,000 now, in just ten short years you'll have.. ..let's see..<br /> <br /> :Ponytail: ..$1,219.<br /> <br /> :Ponytail: Ok, so compound interest isn't some magical force.<br /> :Megan: Yeah, I'm just gonna try to make more money.<br /> <br /> {{comic discussion}}<br /> [[Category:Comics featuring Megan]]<br /> [[Category:Comics featuring Ponytail]]<br /> [[Category:Math]]</div>

192.139.231.5