Compound Interest and the rule of 72

Compound interest is the interest accumulated from the total sum of money you have. Simple interest accumulates based on the intial sum whereas compound interest allows you to make interest off of your interest!

The equation for compound interest is: P = C(1+ r/n)^nt

Where:
P = future value
C = initial deposit
r = interest rate (expressed as a fraction: eg. 0.06 for 6%)
n = # of times per year interest in compounded
t = number of years invested

The rule of 72 says that to find the number of years needed to double your money at a given interest rate, you just divide the interest rate into 72. For example, if the interest rate is 25% then you can double your money in three years.

Insider Trading Scandal - What Happened?

This has been the biggest insider trading scandal broken up since the 1980's. It involved 15 million dollars over the course of 5 years. It was busted on march 1st. They used insiders at Morgan Stanley and Co. and UBS Securities LLC to gain lots of valuable information. People were being tipped off about stock upgrades and downgrades by UBS. This let investors cash in before the news hit the market when everyone else would find out. They used disposable cell phones and secret codes in order to keep the operation a secret.

13 people were arrested.

Stock Market Game - 1 - Initial Investment Strategy

I am considering stocks in healthcare. Seeing as more then 50% of people in America are obese, I think there are a lot of opportunities to make money. Many citizens are willing to spend a fortune on diet programs, pills and books. I bought a couple stocks of webmd (it’s a website that lets you self-diagnose yourself which I am guilty of, and also lets you search many types of illnesses) and some of volcano (they produce medical supplies)

I haven’t bought too many stocks because I am not so familiar with the market yet. Lucky for me I bought only a few so far because the recent crash would’ve cost me.

I don’t plan on spending all my money all at once nor do I plan on letting my stocks gather dust till June. I really want to win so I will try to balance my risks with good judgments and research.

Types Of Economic Systems

A traditional economy is an economic system where people are wealthy by inheritance. This system has a very strong social network. It is strongly connected to farming. In most countries traditional economy has been replaced by command economy, market economy or mixed economy. Today it’s found mainly in underdeveloped, agricultural parts of south America, and Asia

Centrally Planned (Command) Economy- This is an economy where the government controls where the money goes. They decide what they want distributed and have private enterprises supply the goods. Cuba and North Korea have this type of economy


Market Economy- It is the opposite of a planned economy. There is no central government coordination. Individuals decide what is bought and sold based upon a free price system. Instead of pursuing the government’s plans, people pursue their own self-interest. Hong Kong and Singapore have this type of economy.


Mixed Economy- it combines elements of capitalism and socialism. It is a mix of market economy and command economy. There are private and state owned enterprises. The United States has a mixed economy.