The Power of Compound Interest
About:
The chart below represents the investing habits of two individuals. You can play around with the values (interest rate, payment amount, and how often you invest) to see the difference investing early makes when it comes to compounding interest.
Example:
• Try seeing what happens when Person A starts investing at age 22 (and continues investing through age 67), while Person B invests the same amount per year but waits to start investing till age 30 (and continues investing till age 67).
• Try seeing what happens when Person A invests only for a few years in the beginning, such as from age 22 to age 32, compared to when Person B invests the same amount per year but only from age 32 onwards (investing 3x as much and 3x as long).
• Enter the age you want person a and person b to start and end.
• To adjust the interest rate and $ amount invested per year, click the respective box and type your desired value.
The basic and advanced versions of this online investment calculator are meant to be used as an estimation to showcase the power of compound interest. Note that different online investment calculators will slightly differ in their estimated results, based on the method used to calculate the compound interest (such as annual, semi-annual, monthly, or daily).