The Power of Compounding by Dillman, Lauren Alyssa

Nest Egg #1

ladillman — 2019-12-06 23:59:23 UTC

Total Invested: $10,000

Interest Earned: $351,635.99

Total Amount: $361,635.99

Nest Egg #2

ladillman — 2019-12-07 00:00:55 UTC

Total Invested: $35,000

Interest Earned: $137,316.80

Total Amount: $172,316.80

Differences

ladillman — 2019-12-07 00:05:39 UTC

There are a few differences between the two investment strategies. Option one had the person invest a lump sum at age 20 for 45 years. That lump sum was compounded monthly at 8%. Option two had the person invest later for only 35 years. The investments were yearly increments of $1,000 and were only compounded annually at 8%. In conclusion, it makes sense why an investment compounded monthly for a longer period earns more in the long run.

Lesson Learned

ladillman — 2019-12-07 00:09:57 UTC

Start investing early!!!

ladillman — 2019-12-07 00:15:30 UTC

ladillman — 2019-12-07 00:15:35 UTC

ladillman — 2019-12-07 00:15:41 UTC

ladillman — 2019-12-07 00:15:44 UTC

ladillman — 2019-12-07 00:15:52 UTC