**"Albert
Einstein was once asked to name the greatest discovery of the
20th century. Most expected him to refer to his theory of relativity,
nuclear energy or some other important development. His answer
though: Compound interest. Was he joking? Look at these figures,
then decide.**

**If
you were to invest $10,000 at 5% for 20 years, your profit from
the investment would be $17,126 (ignoring taxes). But if you
doubled the rate of interest to 10%, how much money would you
earn?**

**Although
it would seem that doubling the rate would double the return,
Einstein demonstrated that this is not the case: Increase the
rate by 100% increases the return by 350%. In other words, instead
of earning $17,126 in interest, you would earn $63,281.**

**That's
the power of compound interest: Money doesn't grow linearly
- it grows exponentially! Take it a step further: If you earn
15% instead of 5%, your profit would be $187,155. Thus three
times the rate produces 11 times the return. And at 20% - a
four-fold increase in rate - your profit would be $518,275 or
a return 37 times higher that that produced by 5%."**