Albert Einstein famously said that compound interest is the 8th wonder of the world, but its power is difficult to grasp. So, to give a simple visual demonstration, I'll double the amount of "c"s each time one is used in just three short sentences below. Imagine that each "c" is one cent deposited in a compounding savings account:
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As you can see, compound interest makes a lot of cents. Imagine what it does with dollars.*
Check out how compound interest works by visiting our savings and retirement calculators here:
- Save now vs. save later
- Becoming a millionaire
- Income generated by a savings plan
- How long will it take to double my savings?
- How long until my savings reach my goal?
- How much should I save to reach my goal?
- What could my current savings grow to?
- Calculate Rate of Return
- How much will I need to save for retirement?
- Are my current retirement savings sufficient?
- Social security retirement income estimator
- How does inflation impact my retirement income needs?
- I'm retired, how long will my savings last?
- When should I begin saving for retirement?
- Should I convert discretionary expenses to savings?
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*Note that the number of compounding periods per year will affect the total earned on an investment. “Compound interest” is a commonly used phrase to indicate the accrual of funds by a compounding process, though at credit unions the accruals by this process are dividends.
Please contact Logix at (800) 328-5328 or visit www.lfcu.com if you have any questions about this topic or would like to consider opening an account.
