This scenario demonstrates why it's important to let your savings grow over time. The significant ending investment balance is a result of the power of compounding over the 40 years, showcasing how time allows investments to grow substantially, even when starting with a relatively small amount and making regular contributions.
Question 8 of 8
Starting amount: $500, Years to invest: 40, Additional contributions: $100 per month, Average annual rate of return: 7.6% compounded annually, Total amount invested: 48,500, Ending investment balance: $289,279.40. This demonstrates why it's important to
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start with a large amount of savings
save as much as you can every single month
avoid retirement until you're 75
let your savings grow over time
1 answer