The formula of compound interest is: f = p * (1+I) n. Bringing 3.5% into this formula is the algorithm of 3.5% compound interest. In this formula, F represents the final profit, P represents the investment principal, I represents the interest rate, and n represents the investment period.
For example, the investment 10000, the interest rate is 3. % and the term is 10 year, the final profit is10000 * (1+3.5%)10. The algorithm of compound interest is to calculate the interest after the principal expires to the next principal, which is also commonly known as rolling interest. Compared with simple interest, compound interest can get more benefits.
Three elements of compound interest:
1. initial principal: the initial principal is very important for any investment to obtain greater returns. As long as the principal base is large enough, regardless of the interest rate, the final income under the compound interest algorithm will not be small;
2. Investment interest rate: Interest rate is the key to determine investment income. Even if the principal is insufficient, as long as the investment interest rate is high enough, the income can be doubled under the compound interest algorithm;
3. Investment period: Because the interest generated from the initial principal is included in the next principal in the compound interest algorithm, the investment period is very important and too short, which is actually not much different from the simple interest algorithm. Only long-term investment can complete the miracle of asset profit multiplication under the compound interest algorithm.
Whether whole life insurance can get it in five years depends. If whole life insurance can't get it within five years, the premium in whole life insurance is usually based on the death or total disability of the insured. Only when the insured dies or is completely disabled within the time stipulated in the contract can the insurance company return the paid insurance premium; If it is an increasing whole life insurance, the cash value and the insured amount of the policy will be increased regularly every year, which is an insurance wealth management product. After 5 years, it can be collected by reducing the insured amount.