What is compounding?

Compounding creates a self accelerating effect that results in exponentially faster growth

Let's look at an example:

Three people with the same starting capital of $1,000 and a fixed interest rate of 1% daily over the course of a year.

The only difference is how each one used compounding: One doesn't use compounding at all, one uses monthly compounding and the last one compounds daily

Person A: no compounding

Investment: $1000

Daily payout: 1000 x 0.01 = $10

Profit after one year: 365 x $10 = $3650

Total profit: $3650

Investment: $1000

Daily payout: 1000 x 0.01 = $10

Profit after one year: 365 x $10 = $3650

Total profit: $3650

Person B: monthly compounding

Starting investment: $1,000

Daily payout: 0.01 x $1,000 = $10

Profit after one month: 30 x $10 = $300

First compounding: The $300 profit are reinvested, bringing the total investment for the second month up to $1,300

Starting investment 2nd month: $1.300

Daily payout: 0.01 x $1.300 = $13

Profit during 2nd month: 30 x $13 = $390

Second compounding: The $390 profit are reinvested, bringing the total investment for the second month up to $1,690

Starting investment 2nd month: $1,690

Daily payout: 0.01 x $1,690 = $16.90

Profit during 2nd month: 30 x $16.90 = $507

Imagine this pattern repeating 10 more times for the rest of the year

Let's look at the math to figure out the final amount:

Monthly Growth: 1% => 1.01 x 30 = 1.30

Number of months in a year: 12

Yearly Growth: 1.30 to the power of 12 = 1.30 ^ 12 = 23.29 = 2329%

Total Profit: 2329% x $1,000 = $23,290

Starting investment: $1,000

Daily payout: 0.01 x $1,000 = $10

Profit after one month: 30 x $10 = $300

First compounding: The $300 profit are reinvested, bringing the total investment for the second month up to $1,300

Starting investment 2nd month: $1.300

Daily payout: 0.01 x $1.300 = $13

Profit during 2nd month: 30 x $13 = $390

Second compounding: The $390 profit are reinvested, bringing the total investment for the second month up to $1,690

Starting investment 2nd month: $1,690

Daily payout: 0.01 x $1,690 = $16.90

Profit during 2nd month: 30 x $16.90 = $507

Imagine this pattern repeating 10 more times for the rest of the year

Let's look at the math to figure out the final amount:

Monthly Growth: 1% => 1.01 x 30 = 1.30

Number of months in a year: 12

Yearly Growth: 1.30 to the power of 12 = 1.30 ^ 12 = 23.29 = 2329%

Total Profit: 2329% x $1,000 = $23,290

Person C: daily compounding

Starting investment: $1,000

Daily payout: 0.01 x $1,000 = $10

Profit after one day: 1 x $10 = $10

First compounding: The $10 profit are reinvested, bringing the total investment for the second day up to $1,010

Starting investment 2nd day: $1,010

Daily payout: 0.01 x $1,010 = $10.10

Profit during 2nd day: 1 x $10.10 = $10.10

Second compounding: The $10.10 profit are reinvested, bringing the total investment for the second month up to $1,020.10

Starting investment 3rd day: $1,020.10

Daily payout: 0.01 x $1,020.10 = $10.20

Profit during 3rd day: 1 x $10.20 = $10.20

Imagine this pattern repeating 363 more times for the rest of the year

Let's look at the math to figure out the final amount:

Daily Growth: 1% => 1.01

Number of days in a year: 365

Yearly Growth: 1.01 to the power of 365 = 1.01 ^ 365 = 37.78 = 3778%

Total Profit: 3778% x $1,000 = $37,780

Starting investment: $1,000

Daily payout: 0.01 x $1,000 = $10

Profit after one day: 1 x $10 = $10

First compounding: The $10 profit are reinvested, bringing the total investment for the second day up to $1,010

Starting investment 2nd day: $1,010

Daily payout: 0.01 x $1,010 = $10.10

Profit during 2nd day: 1 x $10.10 = $10.10

Second compounding: The $10.10 profit are reinvested, bringing the total investment for the second month up to $1,020.10

Starting investment 3rd day: $1,020.10

Daily payout: 0.01 x $1,020.10 = $10.20

Profit during 3rd day: 1 x $10.20 = $10.20

Imagine this pattern repeating 363 more times for the rest of the year

Let's look at the math to figure out the final amount:

Daily Growth: 1% => 1.01

Number of days in a year: 365

Yearly Growth: 1.01 to the power of 365 = 1.01 ^ 365 = 37.78 = 3778%

Total Profit: 3778% x $1,000 = $37,780

But be careful: Compounding requires you to reinvest profits into the platform - which means they are only paper gains and will be gone if the HYIP crashes! There is a fine balance between compounding and cashouts that has to be adjusted as the HYIP evolves

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