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Spanish# Aprovechar más su dinero

# Making the most out of your money

### The magic of compound interest

Money is not easy to earn. It does not fall from the sky, nor does it grow on trees. It also does not magically appear in your pocket.

Like the majority of Americans, you probably have to earn your money. Perhaps you are working - babysitting, mowing lawns, cleaning garages, doing housework - to earn extra money. If that's the case, then you know how hard it is to work.

Would you like your money to work for you? It can be done by saving at a credit union. The deposits in your account earn interest. The more you save and the longer you keep your money in your account, the harder your money works for you.

Can you save $1 a day? If you save one dollar a day for 10 years in a piggybank, how much would you have in 10 years? $3,650. That's a lot of money. But, if you save a dollar a day in a savings account at your credit union and your account earns 2.5% interest, then you would have $4,147. Or $497 more.

Where did the $497 more come from? It's magic...the magic of compound interest. If you save the interest your money makes, you also earn interest. A dollar a day for 10 years results in $3,650. Therefore, if you work to save $3,650 in 10 years, your money works to produce $497. That's cash that works!

Do you want to impress your friends? Use the 72 Rule to estimate how much time it takes to double your money. This is the result of depositing a sum of money in an account without withdrawing it or adding to it. It works like this:

1. Divide 72 by the interest rate that you expect to earn. The result will be the years it takes to double your money. For example, if your savings account pays 3% interest, use the following formula:

72 / 3% interest = 24 years

2. Or divide 72 by the years in which you want your money to double to find out how much of an interest rate you need. For example, if you want your money to double in 9 years, use the following formula to find out what interest rate you need:

72/9 = 8% interest*

Put your money to work in a savings account at the credit union.

*For practical purposes, the interest rates go up and down. In actuality, an 8% interest rate is not a realistic estimate. Find out what interest rate your credit union is offering and use the first formula to obtain a more realistic answer.