I also want 100 of that.

That's why we say it compounds.

Let's say they have no interest expense.

So just as a review, let's say I'm running some type of a bank and I tell you that I am offering 10 interest that compounds annually.

My mortgage actually might be something like 4,000 a month.

Interest. Weekly.

So, for an extra 20 ...

So 5 on 100,000 is 5,000 per year in interest.

And of course the difference is the money that he had to spend on tax.

I'll have to take a 750,000 mortgage.

Number of payments per year

I don't know what a good rate is, 6 ?

Well I'm paying 750,000 times 6 a year.

So 110 plus now 11.

If our earnings are 350,000.

And then we could take this down.

Let me write that.

At the moment, however, this money was not nearly sufficient to permit the family to

That's... 65,625 with interest.

You manage, the village manages these warehouses.

Number one son, not too clever.

So he makes 2,000.

But for the simplicity of this argument,

It just so happens we got your money, man, plus interest.

He paid the loan with interest.

But you are not using my son.

But just so you know what EBlT is, EBlT is just Earnings

During normal times in the economy, the Fed tries to control the amount of economic activity that's occuring by targeting the federal funds rate the fed funds rate.

Can a bank just continue issuing loans and checking accounts indefinitely and essentially collecting the difference in the interest between the interest it gets on the loan and the interest it gives on the checking account?

A bank lends us money at interest.

Accrued interest will be paid into your account.

Or, my daughter is the fastest player, there's nobody that can beat her.

I would get 1 million from them.

Please, Ma. He's my son. I have a right...

Because a father's supposed to be able to talk to his son, that's why.

That's called paying off the principal.

He gives you money.

If we were farmers, we'd be eating our seed.

And really figure out what's going to happen to you if housing appreciates, depreciates.

Right?

If I doubt my older sister's ability to pay back the 10 percent interest

I will not bring Tyler into this. I will not use him.

A bank says, OK, sure, I'll give you a 500,000 home equity loan, and in exchange, get 8 interest on that loan.

Breathe, breathe, breathe.

The mother may well be proud of her bright son.