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Over time, it can earn more interest. The more often interest are compounded, the faster the principle will mature.
Opportunity cost is the value of something in term of a chance or the reimbursement that can be received from that opportunity (wikipedia). For example, if a couple purchases a piece of property at a reasonable price and builds a house to live in, the opportunity cost gives the couple a choice to sell the house to pay off other bills or have more money to invest based on the increased money made...
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The formula is written as follows: n72/r where: r = the rate of return per period. Furthermore, an initial amount such as $1000 which has a fixed rate of return of 20% will double itself in just over three and a half years, 72/20 = 3.6. This type of monetary equation is very helpful to use when one need to compare investment chances or home loans...
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