Time
For how long time you save your money is very important.
In the following four examples the money grows with 8 % / year.
But how old you are when you save the money differs.
Example 1 (20 years)
You are 20 years old, and save $100. The money grows with 8 % / year.
When you are 21, your savings will be worth $100 * 1.08 = $108
When you are 22, your savings will be worth $100 * 1.08 * 1.08 = $116.64
When you are 23, your savings will be worth $100 * 1.08 * 1.08 * 1.08 = $125.97
When you are 24, your savings will be worth $100 * 1.08 * 1.08 * 1.08 * 1.08
= $136.05
…
When you are 67, your savings will be worth $100 * (1.08)47 =
$3723.20
Example 2 (35 years)
You are 35 years old, and save $100. The money grows with 8 % / year.
When you are 36, your savings will be worth $100 * 1.08 = $108
When you are 37, your savings will be worth $100 * 1.08 * 1.08 = $116.64
When you are 38, your savings will be worth $100 * 1.08 * 1.08 * 1.08 = $125.97
When you are 39, your savings will be worth $100 * 1.08 * 1.08 * 1.08 * 1.08
= $136.05
…
When you are 67, your savings will be worth $100 * (1.08)32= $1173.71
Example 3 (50 years)
You are 50 years old, and save $100. The money grows with 8 % / year.
When you are 51, your savings will be worth $100 * 1.08 = $108
When you are 52, your savings will be worth $100 * 1.08 * 1.08 = $116.64
When you are 53, your savings will be worth $100 * 1.08 * 1.08 * 1.08 = $125.97
When you are 54, your savings will be worth $100 * 1.08 * 1.08 * 1.08 * 1.08
= $136.05
…
When you are 67, your savings will be worth $100 * (1.08)17= $370.00
Example 4 (65 years)
You are 65 years old, and save $100. The money grows with 8 % / year.
When you are 66, your savings will be worth $100 * 1.08 = $108
When you are 67, your savings will be worth $100 * 1.08 * 1.08 = $116.64
In the diagram below the money ($100) grows with 8 % / year. You can see and compare how much the savings will be worth at your 67th birthday if you saved them when you were 20, 35, 50 or 65 years.
