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Copyright 2019 Teaching Kids to Buy Stocks

The information on this website is for information and education only and is NOT advice.

How powerful is compound interest?

 

The illustration below shows examples of TWO SAVERS.

Person 1 starts saving at age 18 and stops saving at 30.

Person 2 starts saving at 31 and never stops.

Compound interest is so powerful, Person 2 NEVER catches Person 1.

SEE DATA BELOW

THIS IS A HYPOTHETICAL EXAMPLE, AND DOES NOT EXPRESS ANY PARTICULAR INVESTMENT. IT IS SHOWN TO ILLUSTRATE THE POWER OF COMPOUND INTEREST.

THIS EXAMPLE ASSUMES 6% INTEREST EARNED EACH YEAR ANNUALLY FOR THE TERMS DESCRIBED.

EMAIL US IF YOU HAVE QUESTIONS OR NEED HELP UNDERSTANDING! JJ@TEACHINGKIDSTOBUYSTOCKS.COM

Investor 1

AGE

18

19

20

21

22

23

24

25

26

27

28

29

30

31

32

33

34

35

36

37

38

39

40

41

42

43

44

45

46

47

48

49

50

51

52

53

54

55

56

57

58

59

60

61

62

63

64

65

66

67

68

69

70

71

72

73

74

75

76

77

78

79

80

81

82

83

84

85

86

87

88

89

90

91

92

93

94

95

96

97

98

99

100

101

102

103

104

105

106

107

108

109

110

Beginning Balance

$1,000

$2,060.00

$3,183.60

$4,374.62

$5,637.09

$6,975.32

$8,393.84

$9,897.47

$11,491.32

$13,180.79

$14,971.64

$16,869.94

$18,882.14

$20,015.07

$21,215.97

$22,488.93

$23,838.26

$25,268.56

$26,784.67

$28,391.75

$30,095.26

$31,900.97

$33,815.03

$35,843.93

$37,994.57

$40,274.25

$42,690.70

$45,252.14

$47,967.27

$50,845.31

$53,896.02

$57,129.79

$60,557.57

$64,191.03

$68,042.49

$72,125.04

$76,452.54

$81,039.69

$85,902.08

$91,056.20

$96,519.57

$102,310.75

$108,449.39

$114,956.35

$121,853.74

$129,164.96

$136,914.86

$145,129.75

$153,837.53

$163,067.79

$172,851.85

$183,222.96

$194,216.34

$205,869.32

$218,221.48

$231,314.77

$245,193.66

$259,905.28

$275,499.59

$292,029.57

$309,551.34

$328,124.42

$347,811.89

$368,680.60

$390,801.44

$414,249.52

$439,104.50

$465,450.77

$493,377.81

$522,980.48

$554,359.31

$587,620.87

$622,878.12

$660,250.81

$699,865.86

$741,857.81

$786,369.28

$833,551.43

$883,564.52

$936,578.39

$992,773.09

$1,052,339.48

$1,115,479.85

$1,182,408.64

$1,253,353.16

$1,328,554.34

$1,408,267.61

$1,492,763.66

$1,582,329.48

$1,677,269.25

$1,777,905.41

$1,884,579.73

$1,997,654.51

6% Interest

$60.00

$123.60

$191.02

$262.48

$338.23

$418.52

$503.63

$593.85

$689.48

$790.85

$898.30

$1,012.20

$1,132.93

$1,200.90

$1,272.96

$1,349.34

$1,430.30

$1,516.11

$1,607.08

$1,703.51

$1,805.72

$1,914.06

$2,028.90

$2,150.64

$2,279.67

$2,416.45

$2,561.44

$2,715.13

$2,878.04

$3,050.72

$3,233.76

$3,427.79

$3,633.45

$3,851.46

$4,082.55

$4,327.50

$4,587.15

$4,862.38

$5,154.12

$5,463.37

$5,791.17

$6,138.64

$6,506.96

$6,897.38

$7,311.22

$7,749.90

$8,214.89

$8,707.78

$9,230.25

$9,784.07

$10,371.11

$10,993.38

$11,652.98

$12,352.16

$13,093.29

$13,878.89

$14,711.62

$15,594.32

$16,529.98

$17,521.77

$18,573.08

$19,687.47

$20,868.71

$22,120.84

$23,448.09

$24,854.97

$26,346.27

$27,927.05

$29,602.67

$31,378.83

$33,261.56

$35,257.25

$37,372.69

$39,615.05

$41,991.95

$44,511.47

$47,182.16

$50,013.09

$53,013.87

$56,194.70

$59,566.39

$63,140.37

$66,928.79

$70,944.52

$75,201.19

$79,713.26

$84,496.06

$89,565.82

$94,939.77

$100,636.16

$106,674.32

$113,074.78

$119,859.27

Additions

$1,000

$1,000

$1,000

$1,000

$1,000

$1,000

$1,000

$1,000

$1,000

$1,000

$1,000

$1,000

Ending Balance

$2,060.00

$3,183.60

$4,374.62

$5,637.09

$6,975.32

$8,393.84

$9,897.47

$11,491.32

$13,180.79

$14,971.64

$16,869.94

$18,882.14

$20,015.07

$21,215.97

$22,488.93

$23,838.26

$25,268.56

$26,784.67

$28,391.75

$30,095.26

$31,900.97

$33,815.03

$35,843.93

$37,994.57

$40,274.25

$42,690.70

$45,252.14

$47,967.27

$50,845.31

$53,896.02

$57,129.79

$60,557.57

$64,191.03

$68,042.49

$72,125.04

$76,452.54

$81,039.69

$85,902.08

$91,056.20

$96,519.57

$102,310.75

$108,449.39

$114,956.35

$121,853.74

$129,164.96

$136,914.86

$145,129.75

$153,837.53

$163,067.79

$172,851.85

$183,222.96

$194,216.34

$205,869.32

$218,221.48

$231,314.77

$245,193.66

$259,905.28

$275,499.59

$292,029.57

$309,551.34

$328,124.42

$347,811.89

$368,680.60

$390,801.44

$414,249.52

$439,104.50

$465,450.77

$493,377.81

$522,980.48

$554,359.31

$587,620.87

$622,878.12

$660,250.81

$699,865.86

$741,857.81

$786,369.28

$833,551.43

$883,564.52

$936,578.39

$992,773.09

$1,052,339.48

$1,115,479.85

$1,182,408.64

$1,253,353.16

$1,328,554.34

$1,408,267.61

$1,492,763.66

$1,582,329.48

$1,677,269.25

$1,777,905.41

$1,884,579.73

$1,997,654.51

$2,117,513.78

Total Principal Saved

$2,000

$3,000

$4,000

$5,000

$6,000

$7,000

$8,000

$9,000

$10,000

$11,000

$12,000

$13,000

$13,000

$13,000

$13,000

$13,000

$13,000

$13,000

$13,000

$13,000

$13,000

$13,000

$13,000

$13,000

$13,000

$13,000

$13,000

$13,000

$13,000

$13,000

$13,000

$13,000

$13,000

$13,000

$13,000

$13,000

$13,000

$13,000

$13,000

$13,000

$13,000

$13,000

$13,000

$13,000

$13,000

$13,000

$13,000

$13,000

$13,000

$13,000

$13,000

$13,000

$13,000

$13,000

$13,000

$13,000

$13,000

$13,000

$13,000

$13,000

$13,000

$13,000

$13,000

$13,000

$13,000

$13,000

$13,000

$13,000

$13,000

$13,000

$13,000

$13,000

$13,000

$13,000

$13,000

$13,000

$13,000

$13,000

$13,000

$13,000

$13,000

$13,000

$13,000

$13,000

$13,000

$13,000

$13,000

$13,000

$13,000

$13,000

$13,000

$13,000

$13,000

Investor 2

AGE

18

19

20

21

22

23

24

25

26

27

28

29

30

31

32

33

34

35

36

37

38

39

40

41

42

43

44

45

46

47

48

49

50

51

52

53

54

55

56

57

58

59

60

61

62

63

64

65

66

67

68

69

70

71

72

73

74

75

76

77

78

79

80

81

82

83

84

85

86

87

88

89

90

91

92

93

94

95

96

97

98

99

100

101

102

103

104

105

106

107

108

109

110

Beginning Balance

$0.00 

$0.00

$0.00

$0.00

$0.00

$0.00

$0.00

$0.00

$0.00

$0.00

$0.00

$0.00

$0.00

$1,000.00

$2,060.00

$3,183.60

$4,374.62

$5,637.09

$6,975.32

$8,393.84

$9,897.47

$11,491.32

$13,180.79

$14,971.64

$16,869.94

$18,882.14

$21,015.07

$23,275.97

$25,672.53

$28,212.88

$30,905.65

$33,759.99

$36,785.59

$39,992.73

$43,392.29

$46,995.83

$50,815.58

$54,864.51

$59,156.38

$63,705.77

$68,528.11

$73,639.80

$79,058.19

$84,801.68

$90,889.78

$97,343.16

$104,183.75

$111,434.78

$119,120.87

$127,268.12

$135,904.21

$145,058.46

$154,761.97

$165,047.68

$175,950.54

$187,507.58

$199,758.03

$212,743.51

$226,508.12

$241,098.61

$256,564.53

$272,958.40

$290,335.90

$308,756.06

$328,281.42

$348,978.31

$370,917.01

$394,172.03

$418,822.35

$444,951.69

$472,648.79

$502,007.72

$533,128.18

$566,115.87

$601,082.82

$638,147.79

$677,436.66

$719,082.86

$763,227.83

$810,021.50

$859,622.79

$912,200.16

$967,932.17

$1,027,008.10

$1,089,628.59

$1,156,006.30

$1,226,366.68

$1,300,948.68

$1,380,005.60

$1,463,805.94

$1,552,634.29

$1,646,792.35

$1,746,599.89

6% Interest

$0.00

$0.00

$0.00

$0.00

$0.00

$0.00

$0.00

$0.00

$0.00

$0.00

$0.00

$0.00

$0.00

$60.00

$123.60

$191.02

$262.48

$338.23

$418.52

$503.63

$593.85

$689.48

$790.85

$898.30

$1,012.20

$1,132.93

$1,260.90

$1,396.56

$1,540.35

$1,692.77

$1,854.34

$2,025.60

$2,207.14

$2,399.56

$2,603.54

$2,819.75

$3,048.93

$3,291.87

$3,549.38

$3,822.35

$4,111.69

$4,418.39

$4,743.49

$5,088.10

$5,453.39

$5,840.59

$6,251.03

$6,686.09

$7,147.25

$7,636.09

$8,154.25

$8,703.51

$9,285.72

$9,902.86

$10,557.03

$11,250.45

$11,985.48

$12,764.61

$13,590.49

$14,465.92

$15,393.87

$16,377.50

$17,420.15

$18,525.36

$19,696.89

$20,938.70

$22,255.02

$23,650.32

$25,129.34

$26,697.10

$28,358.93

$30,120.46

$31,987.69

$33,966.95

$36,064.97

$38,288.87

$40,646.20

$43,144.97

$45,793.67

$48,601.29

$51,577.37

$54,732.01

$58,075.93

$61,620.49

$65,377.72

$69,360.38

$73,582.00

$78,056.92

$82,800.34

$87,828.36

$93,158.06

$98,807.54

$104,795.99

Additions

 

 

 

 

 

 

 

 

 

 

 

 

$1,000

$1,000

$1,000

$1,000

$1,000

$1,000

$1,000

$1,000

$1,000

$1,000

$1,000

$1,000

$1,000

$1,000

$1,000

$1,000

$1,000

$1,000

$1,000

$1,000

$1,000

$1,000

$1,000

$1,000

$1,000

$1,000

$1,000

$1,000

$1,000

$1,000

$1,000

$1,000

$1,000

$1,000

$1,000

$1,000

$1,000

$1,000

$1,000

$1,000

$1,000

$1,000

$1,000

$1,000

$1,000

$1,000

$1,000

$1,000

$1,000

$1,000

$1,000

$1,000

$1,000

$1,000

$1,000

$1,000

$1,000

$1,000

$1,000

$1,000

$1,000

$1,000

$1,000

$1,000

$1,000

$1,000

$1,000

$1,000

$1,000

$1,000

$1,000

$1,000

$1,000

$1,000

$1,000

$1,000

$1,000

$1,000

$1,000

$1,000

$1,000

Ending Balance

$0.00

$0.00

$0.00

$0.00

$0.00

$0.00

$0.00

$0.00

$0.00

$0.00

$0.00

$0.00

$1,000.00

$2,060.00

$3,183.60

$4,374.62

$5,637.09

$6,975.32

$8,393.84

$9,897.47

$11,491.32

$13,180.79

$14,971.64

$16,869.94

$18,882.14

$21,015.07

$23,275.97

$25,672.53

$28,212.88

$30,905.65

$33,759.99

$36,785.59

$39,992.73

$43,392.29

$46,995.83

$50,815.58

$54,864.51

$59,156.38

$63,705.77

$68,528.11

$73,639.80

$79,058.19

$84,801.68

$90,889.78

$97,343.16

$104,183.75

$111,434.78

$119,120.87

$127,268.12

$135,904.21

$145,058.46

$154,761.97

$165,047.68

$175,950.54

$187,507.58

$199,758.03

$212,743.51

$226,508.12

$241,098.61

$256,564.53

$272,958.40

$290,335.90

$308,756.06

$328,281.42

$348,978.31

$370,917.01

$394,172.03

$418,822.35

$444,951.69

$472,648.79

$502,007.72

$533,128.18

$566,115.87

$601,082.82

$638,147.79

$677,436.66

$719,082.86

$763,227.83

$810,021.50

$859,622.79

$912,200.16

$967,932.17

$1,027,008.10

$1,089,628.59

$1,156,006.30

$1,226,366.68

$1,300,948.68

$1,380,005.60

$1,463,805.94

$1,552,634.29

$1,646,792.35

$1,746,599.89

$1,852,395.88

Total Principal Saved

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

$1,000

$2,000

$3,000

$4,000

$5,000

$6,000

$7,000

$8,000

$9,000

$10,000

$11,000

$12,000

$13,000

$14,000

$15,000

$16,000

$17,000

$18,000

$19,000

$20,000

$21,000

$22,000

$23,000

$24,000

$25,000

$26,000

$27,000

$28,000

$29,000

$30,000

$31,000

$32,000

$33,000

$34,000

$35,000

$36,000

$37,000

$38,000

$39,000

$40,000

$41,000

$42,000

$43,000

$44,000

$45,000

$46,000

$47,000

$48,000

$49,000

$50,000

$51,000

$52,000

$53,000

$54,000

$55,000

$56,000

$57,000

$58,000

$59,000

$60,000

$61,000

$62,000

$63,000

$64,000

$65,000

$66,000

$67,000

$68,000

$69,000

$70,000

$71,000

$72,000

$73,000

$74,000

$75,000

$76,000

$77,000

$78,000

$79,000

$80,000

$81,000

CLICK HERE to see our Future Value Calculator on our Compound Interest page.

CLICK HERE to download an Excel Spreadsheet with this and other Compound Interest examples built-in to show your kids (and yourself).

Read our blog post dedicated to

The Basics of Compound Interest titled Compound Interest: Taking Einstein for Granted