What is compound interest, and is it good or bad?

first_img 48SHARESShareShareSharePrintMailGooglePinterestDiggRedditStumbleuponDeliciousBufferTumblr,Heather Anderson Heather Anderson covers consumer financial news for CUInsight.com, offering readers tips on budgeting, setting and achieving financial goals, and developing a healthy relationship with money. She is co-founder of … Web: www.financialfeed.com Details Compound interest is the eighth wonder of the world. He who understands it, earns it. He who doesn’t, pays it.That saying, which some attribute to Albert Einstein, describes compound interest perfectly.What is compound interest? If you have a savings or investment account, it’s money you earn from your interest. That’s a good thing.If your loan has compound interest, it’s interest that’s charged on your interest. That’s a bad thing.Let’s take a closer look at compound interest in a savings account. Say you have a savings account with $1,000 in it and you earn 6% APY – that stands for annual percentage yield. With simple interest, you’d just earn $60 off your $1,000 in one year. But because of compound interest, you earn more.Let’s break it down. Each month, your account earns 0.5% interest, which is $5. So at the end of the first month, you have $1,005 in your account. So the next month, when you earn 0.5% interest, you’re earning it on $1005, which is $5.025 (we’ll round it up to $5.03) instead of $5. Because of compound interest, you’ve already earned an extra three cents. Your new balance is $1,010.03, which earns you $5.05 in interest. You picked up an extra two cents for a new balance of $1,015.08. Over time, those couple of cents add up and you earn more and more. That’s why they say to begin saving for retirement when you’re young, because over a period of 40 years, compound interest really adds up.Now let’s look at the dark side of compounding interest. Let’s say you have a $5,000 balance on a loan with compound interest, and it has a 15% APR – that’s annual percentage rate – and it compounds daily. If you wait 30 days to make your first payment, your balance will already be up to $5,063.70. That means even if you made payments of $63.70 every month, the outstanding balance would stay the same for the rest of your life.As you can see, compound interest can be very expensive. That’s why so many financial gurus advise you to pay off your credit cards first if you’re trying to improve your finances. Car loans and personal loans typically have simple interest, not compound, so there’s a better deal. Mortgages have simple interest but they make you pay it all up front, so it takes much longer to pay down your principal. (Principal is the original amount you borrowed.)Make sense? Remember – compound interest in savings is good. But in a loan, it’s bad for your budget.last_img read more

Amazon Alexa Care Hub update helps in caring for family members

first_img– Advertisement – Amazon Alexa is introducing a new feature called Care Hub, designed to make help people to care for aging family members.The company said it has been hearing from customers for years about using Alexa’s voice assistant to monitor aging relatives, who are increasingly looking to stay in their residences rather than move to a nursing home. The shift has created a more than $30 billion market for assistive technology, according to the Consumer Technology Association.- Advertisement – Amazon has been looking into the aging space for years, at one point discussing a potential collaboration with AARP, a lobbying group that represents the interests of people over 50. Reid acknowledged that it’s “day one” for Amazon moving into the space, and that there’s a lot more the company can do to help seniors age in place.Reid said the company has been working on the product for about 18 months, but it has taken on a new importance given that so many people are staying at home with Covid-19 and unable to see their relatives in person. The company has been beta testing the product with Amazon employees and their own loved ones in the past few months, before opening it up to its broader population of users.center_img As of Wednesday, customers with an Alexa voice assistant can link their account to an aging loved one’s Alexa account. If the family member accepts the invitation, their caregiver can send alerts and view their relative’s activity feed. That feed is more of a high-level summary that includes basic information such as lights being used in the home rather than a way to spy on parents.There’s also an emergency contact feature where the loved one can simply say “Alexa, call for help.” Alexa will then send an immediate push notification to the caregiver.“Once that connection is established, the care recipient doesn’t need to do anything and can go about their day as normal,” said Toni Reid, vice president of Alexa Experiences and Echo Devices. “What the caregiver gets is some peace of mind.”- Advertisement –last_img read more

USC Security Roundup

first_imgThe following incidents were reported in the USC Dept. of Public Safety incident report summary between Tuesday, Sept. 30, and Wednesday, Oct. 1. Crimes against propertyAt 10:54 p.m. on Sept. 29, it was reported that a suspect used a rock to shatter the rear windshield of a student’s vehicle parked at 37th Street and Raymond Avenue. The suspect used an unknown object to scratch the paint on the rear passenger side door.At 6:16 p.m. on Sept. 30, a staff member reported the hubcaps of her car missing from the Soto Street Building lot.At 10:19 p.m. on Sept. 30, a staff member reported that an unknown object struck and shattered the front windshield of a USC tram.    At 2:30 a.m. on Oct. 1, DPS responded to a report of a man carrying a bicycle while riding another one at Subway. The man was later taken in for booking.Miscellaneous incidentsAt 8:09 a.m. on Sept. 29, a student reported receiving two suspicious envelopes in the mail and brought them to the DPS office for assistance. Safety Office personnel were requested to open the envelopes and nothing hazardous was found inside them.At 9:04 a.m. on Sept. 29, a staff member drove a University tram into the base of a light post at Biggy Lot, causing minor damage to the tram and the post. At 8:54 p.m. on Sept. 29, a staff member reported that a key broke off the ignition of a University vehicle at Parking Structure A.last_img read more