Compound Interest...

The tables below help to demonstrate the power of compound interest, and should be some incentive to get you to save early and often. They show how much money you would have after a certain number of years at a certain average rate of return. However, before deciding that you're going to get 20% returns for 50 years straight, keep in mind that the long term return for the highest returning asset class, US stocks, has returned only about 11.5% a year on average.

Start With $1000, and Add Nothing More

Average Yearly Return	Number of Years
	10	20	30	40	50
2.5%	$1,280	$1,639	$2,098	$2,685	$3,437
5.0%	$1,629	$2,653	$4,322	$7,040	$11,467
7.5%	$2,061	$4,248	$8.755	$18,044	$37,190
10.0%	$2,594	$6,727	$17,449	$45,259	$117,391
12.5%	$3,247	$10,545	$34,243	$111,199	$361,099
15.0%	$4,046	$16,367	$66,212	$267,864	$1,083,657
17.5%	$5,016	$25,163	$126,222	$633,162	$3,176,094
20.0%	$6,192	$38,338	$237,376	$1,469,772	$9,100,438

Start With $2000, and Add $2000 More Every Year (IRA)

Average Yearly Return	Number of Years
	10	20	30	40	50
2.5%	$22,407	$51,089	$87,805	$134,805	$194,969
5.0%	$25,156	$66,132	$132,878	$241,600	$418,696
7.5%	$28,294	$86,609	$206,799	$454,513	$965,060
10.0%	$31,875	$114,550	$328,988	$885,185	$2,327,817
12.5%	$35,957	$152,722	$531,893	$1,763,184	$5,761,582
15.0%	$40,607	$204,887	$869,490	$3,558,181	$14,435,433
17.5%	$45,900	$276,145	$1,431,112	$7,224,706	$36,286,787
20.0%	$51,917	$373,376	$2,363,763	$14,687,716	$90,994,382