Have you ever heard of Einstein’s Rule of 72? Let’s say you have a credit card debt of $5,000. If you divide the interest rate on your loan into 72, the result will be the length of time it takes for the loan to double (paying only minimum monthly payments). If the rate is 24%, your loan would double in 3 years to $10,000, and in another 3 years, the debt would be $20,000. Often, people feel like they are paying and paying and getting nowhere, and it will feel like that if one is only paying the minimum monthly payment. Purchasing furniture at $2,000 with a deferred payment is costly if you do not pay within the deadline amount. You would then be paying interest on the original amount – at 28% interest and a minimum payment of $70, it will take 4 years and interest would be $1,415.

Doris Minervini, Abakhan & Associates Inc.
Abakhan.com