The Power of Compound Interest

The power of compound interest is the reason why you should start saving money now. Small amounts of money today will become large sums in the future. This is a chart of what a $1,000 can do in 20-40 years at different interest rates.


5% for 20 years = $2,712 for 40 years = $7,040

7% for 20 years = $4,038 for 40 years = $14,974

8% for 20 years = $4,926 for 40 years = $21,725

10% for 20 years = $7,328 for 40 years = $45,259


The average rate of return on the stock market is 10%. In otherwords $1,000 paid into a mutual fund today, will have a value of over $45,000 when you are ready to retire.

This is the reason you need to start investing today.