By Byron Moore, posted September 4, 2018
Originally published in the News-Star and the Shreveport Times on Sunday, September 2, 2018.
You knew debt was bad.
Maybe worse than you even thought.
But here’s the good news – the thing that makes debt worse than you thought can be the very thing that can make your situation better than you could imagine.
Most of us are familiar with interest rates. That’s what a lender charges a borrower for the privilege of using their money over a period of time.
So a mortgage company charges a home buyer 4% to borrow money for 30 years to purchase a house. A car buyer may pay a bank 6% over 5 years to buy a car. A shopper pays a credit card company 18% to make consumer purchases.
Other than the credit cards, most of those interest rates sound pretty low.
But now we need to consider another perspective on interest – interest volume.
The volume of interest is the amount of interest charged during any specific interval of time. This is not the same as the rate of interest, as we’ll see.