The Power of Compounding Interest Scenario
Matt's Gift Chuck's Gift
Add $20k each Put $20k into
year to bank account a mutual fund
Year 1 $ 20,000 $ 22,000
Year 5 $ 100,000 $ 32,210
Year 10 $ 200,000 $ 51,875
Year 15 $ 300,000 $ 83,545
Year 20 $ 400,000 $ 134,550
Year 25 $ 500,000 $ 216,694
Year 30 $ 600,000 $ 348,988
Year 35 $ 700,000 $ 562,049
Year 40 $ 800,000 $ 905,185
Year 45 $ 900,000 $1,457,810
Even a one-time deposit of $1000 with a compounded interest rate of 10%
will return around $88,300 after 45 years!