#### “Compound interest is the eighth wonder of the world.

He who understands it, earns it…

he who doesn’t… pays it”

Albert Einstein

#### Interest compounded yearly added at the end of each year

Year | Year Interest | Total Interest | Balance |
---|---|---|---|

(Capital growth per year) | (How much you own) | (Total portfolio) | |

1 | $100,000.00 | $100,000.00 | $2,100,000.00 |

2 | $105,000.00 | $205,000.00 | $2,205,000.00 |

3 | $110,250.00 | $315,250.00 | $2,315,250.00 |

4 | $115,762.50 | $431,012.50 | $2,431,012.50 |

5 | $121,550.63 | $552,563.13 | $2,552,563.13 |

6 | $127,628.16 | $680,191.28 | $2,680,191.28 |

7 | $134,009.56 | $814,200.85 | $2,814,200.85 |

8 | $140,710.04 | $954,910.89 | $2,954,910.89 |

9 | $147,745.54 | $1,102,656.43 | $3,102,656.43 |

10 | $155,132.82 | $1,257,789.25 | $3,257,789.25 |

**Year Interest** – You can see the first table represents the compounding interest per year on the total property portfolio. By year one you can see that the portfolio is growing by $100,000 but by year 5 your portfolio is growing by $155,000 due to the power of compounding interest.

**Total Interest** – It is showing you the total growth of your portfolio. The table above is showing that in year one you own $100,000 of the portfolio, but after 10 years you will own $1,257,789.25 of your portfolio assuming you paid interest only on all your loans.

**Balance** – Is the balance of your portfolio. As you can see we started off with a 2 million dollar portfolio and that same portfolio is now worth over 3.2 million due to the power of compounding interest.

#### Standard Calculation

Base amount: $2,000,000.00

Interest Rate: 5%

Effective Annual Rate: 5%

**Calculation period: 10 years**

**Base portfolio would be around 6 properties worth about $330,000 each. (Total portfolio worth 2 million.)**

#### Interest compounded yearly added at the end of each year

Year | Year Interest | Total Interest | Balance |
---|---|---|---|

(Capital growth per year) | (How much you own) | (Total portfolio) | |

1 | $120,000.00 | $120,000.00 | $2,120,000.00 |

2 | $127,200.00 | $247,200.00 | $2,247,200.00 |

3 | $134,832.00 | $382,032.00 | $2,382,032.00 |

4 | $142,921.92 | $524,953.92 | $2,524,953.92 |

5 | $151,497.24 | $676,451.16 | $2,676,451.16 |

6 | $160,587.07 | $837,038.22 | $2,837,038.22 |

7 | $170,222.29 | $1,007,260.52 | $3,007,260.52 |

8 | $180,435.63 | $1,187,696.15 | $3,187,696.15 |

9 | $191,261.77 | $1,378,957.92 | $3,378,957.92 |

10 | $202,737.48 | $1,581,695.39 | $3,581,695.39 |

**Year Interest** – You can see the first table represents the compounding interest per year on the total property portfolio. By year one you can see that the portfolio is growing by $100,000 but by year 5 your portfolio is growing by $155,000 due to the power of compounding interest.

**Total Interest** – It is showing you the total growth of your portfolio. The table above is showing that in year one you own $100,000 of the portfolio, but after 10 years you will own $1,257,789.25 of your portfolio assuming you paid interest only on all your loans.

**Balance** – Is the balance of your portfolio. As you can see we started off with a 2 million dollar portfolio and that same portfolio is now worth over 3.2 million due to the power of compounding interest.

#### Standard Calculation

Base amount: $2,000,000.00

Interest Rate: 6%

Effective Annual Rate: 6%

**Calculation period: 10 years**

**Base portfolio of 6 properties worth about $330,000 each.**

** (Total portfolio worth 2 million.)**

#### Interest compounded yearly added at the end of each year

Year | Year Interest | Total Interest | Balance |
---|---|---|---|

(Capital growth per year) | (How much you own) | (Total portfolio) | |

1 | $100,000.00 | $100,000.00 | $2,100,000.00 |

2 | $105,000.00 | $205,000.00 | $2,205,000.00 |

3 | $110,250.00 | $315,250.00 | $2,315,250.00 |

4 | $115,762.50 | $431,012.50 | $2,431,012.50 |

5 | $121,550.63 | $552,563.13 | $2,552,563.13 |

6 | $127,628.16 | $680,191.28 | $2,680,191.28 |

7 | $134,009.56 | $814,200.85 | $2,814,200.85 |

8 | $140,710.04 | $954,910.89 | $2,954,910.89 |

9 | $147,745.54 | $1,102,656.43 | $3,102,656.43 |

10 | $155,132.82 | $1,257,789.25 | $3,257,789.25 |

11 | $162,889.46 | $1,420,678.72 | $3,420,678.72 |

12 | $171,033.94 | $1,591,712.65 | $3,591,712.65 |

13 | $179,585.63 | $1,771,298.28 | $3,771,298.28 |

14 | $188,564.91 | $1,959,863.20 | $3,959,863.20 |

15 | $197,993.16 | $2,157,856.36 | $4,157,856.36 |

**Year Interest** – You can see the first table represents the compounding interest per year on the total property portfolio. By year one you can see that the portfolio is growing by $100,000 but by year 5 your portfolio is growing by $155,000 due to the power of compounding interest.

**Total Interest** – It is showing you the total growth of your portfolio. The table above is showing that in year one you own $100,000 of the portfolio, but after 10 years you will own $1,257,789.25 of your portfolio assuming you paid interest only on all your loans.

**Balance** – Is the balance of your portfolio. As you can see we started off with a 2 million dollar portfolio and that same portfolio is now worth over 3.2 million due to the power of compounding interest.

#### Standard Calculation

Base amount: $2,000,000.00

Interest Rate: 5%

Effective Annual Rate: 5%

**Calculation period: 15 years**

**Based on 6 properties at $330,000 each**

#### Interest compounded yearly added at the end of each year

#### Example portfolio

Base amount: $2,000,000.00

Interest Rate: 6%

Average Annual Growth Rate: 6%

**Calculation period: 15 years**

**Based on 6 properties at $330,000 each.**

Year | Year Interest | Total Interest | Balance |
---|---|---|---|

15 | $271,308.47 | $2,793,116.39 | $4,793,116.39 |

1 | $120,000.00 | $120,000.00 | $2,120,000.00 |

2 | $127,200.00 | $247,200.00 | $2,247,200.00 |

3 | $134,832.00 | $382,032.00 | $2,382,032.00 |

4 | $142,921.92 | $524,953.92 | $2,524,953.92 |

5 | $151,497.24 | $676,451.16 | $2,676,451.16 |

6 | $160,587.07 | $837,038.22 | $2,837,038.22 |

7 | $170,222.29 | $1,007,260.52 | $3,007,260.52 |

8 | $180,435.63 | $1,187,696.15 | $3,187,696.15 |

9 | $191,261.77 | $1,378,957.92 | $3,378,957.92 |

10 | $202,737.48 | $1,581,695.39 | $3,581,695.39 |

11 | $214,901.72 | $1,796,597.12 | $3,796,597.12 |

12 | $227,795.83 | $2,024,392.94 | $4,024,392.94 |

13 | $241,463.58 | $2,265,856.52 | $4,265,856.52 |

14 | $255,951.39 | $2,521,807.91 | $4,521,807.91 |

**Year Interest** – You can see the first table represents the compounding interest per year on the total property portfolio. By year one you can see that the portfolio is growing by $120,000 but by year 15 your portfolio is growing by $271,308 due to the power of compounding interest.

**Total Interest** – It is showing you the total growth of your portfolio. The table above is showing that in year one you own $120,000 of the portfolio, but after 15 years you will own $2,793,116 of your portfolio assuming you paid interest only on all your loans.

**Balance** – Is the balance of your portfolio. As you can see we started off with a 2 million dollar portfolio and that same portfolio is now worth $4,793,116 due to the power of compounding interest.