INTEREST
A paragraph in the Star mentions that a worker who put £1 in the savirigs bank and left it untouched for 55 years had £4 13/1 to his credit. Compound interest accounts for it, and the higher the interest rate the greater the relative increase. When the war ends and the Atlantic Charter is put into operation, interest will present a difficult problem. New Zealand's national debt makes an interesting study. In 18S5 it was £30.000.000: fiftv vears later, in 1935, it stood at £280.000.000. In the interval we borrowed each year sums approximately the same as the interest we paid. When we borrowed, say. £5.000,000, and the same year paid £5,000.000 in interest, the borrowing was added to the debt, but the interest paid did n6t reduce it. In fifty years we borrowed £250.000.000, which was added to the debt. As we paid £250.000.000 in interest during the same period. Ave received no benefit from the loans; we simply borrowed our way into debt. What have our economists to say about it? Are they leaving the man-in-the-street to find a solution? C. R. McDONALD.
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Bibliographic details
Auckland Star, Volume LXXIII, Issue 268, 12 November 1942, Page 4
Word Count
186INTEREST Auckland Star, Volume LXXIII, Issue 268, 12 November 1942, Page 4
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