Compound Interest

  • ---Shares

Definition: Interest computed on the sum of the principle and the accrued interest .

Don't ignore the value of investing early. The power of compound interest, coupled with regular contributions and tax-sheltered treatment, means that an early start to investing will put a powerful ally--time--squarely on your side.

For example, let's say, starting at age 35, you invested $3,000 each year with a 14 percent annual return. You'd have an annual retirement income of nearly $60,000 at age 65. But $5,000 invested at the same rate of return beginning at age 45 only results in $30,700 in annual retirement income.

OK

This website uses cookies to allow us to see how our website and related online services are being used. By continuing to use this website, you consent to our cookie collection. More information about how we collect cookies is found here.