---------+------------------------------------------ | Time in which a sum will double itself. Rate per +--------------------+--------------------- cent. | Simple Interest. | Compound Interest. ---------+--------------------+--------------------- 2 | 50 years | 35 years 1 day 2½ | 40 years | 28 years 26 days 3 | 33 years 4 months | 23 years 164 days 3½ | 28 years 208 days | 20 years 54 days 4 | 25 years | 17 years 246 days 4½ | 22 years 81 days | 15 years 273 days 5 | 20 years | 14 years 75 days 6 | 16 years 8 months | 11 years 327 days 7 | 14 years 104 days | 10 years 89 days 8 | 12½ years | 9 years 2 days 9 | 11 years 40 days | 8 years 16 days 10 | 10 years | 7 years 100 days ---------+--------------------+--------------------- The really surprising difference between simple and compound interest is, however, only seen after the first few years are over. A loan of £100 for ten years at 4 per cent. simple interest would give £40, and at 4 per cent. compound interest about £47. But if the loan were for a hundred years the simple interest would be only £400, whilst the compound interest would be no less than £4,950. Having now said all that is necessary at present about interest, we must speak for a little on the subject of banking, for it is by means of banks that most money transactions are satisfactorily managed. What, then, is a bank? There seems, at first sight, something mysterious about it, but it is really a simple institution. It is partly a shop and partly a left-luggage office. It is a shop for dealing in cheques, bills, notes, gold, and silver, and a left-luggage office to which we consign our spare cash to lie till called for. This, however, is only a rough and ready way of putting it, and we may as well add the following extract from a writer who has taken pains to give an exact definition:—“A banker is the custodier of the money of other people. Such is his business, viewed in its simplest aspect. A banker, however, if he hoarded the money deposited with him, would be simply a cash-keeper to the public; his bank would be literally a bank of _deposit_.... But the business of receiving money on deposit has always been, and is now, universally combined with that of lending it out. A banker does not hoard all the money deposited with him—he gives the greater portion out in loan. The lending of money is as much a part of his business as the receiving of deposits.”