bad idea). at the end of 5 years, the new balance would be $14,693. in other words we have built up an additional $4,693 in interest. now let’s use the same example again, except for a 9% interest rate. this small change in interest rate makes the new balance $15,386, for a difference of $693 over the lower interest rate. that might not seem like much, but a mere 1% difference in interest rate over 5 years added an additional 7% to the original balance. that can really add up.
for a more extreme example, let’s compare 5% to 10% interest using the same example as above. 5% interest over 5 