Matt and Chuck -- A little story about compounding Interest
Download
Report
Transcript Matt and Chuck -- A little story about compounding Interest
MATT AND CHUCK
The tale of two guys and the
power of compounding interest!
18 YEARS OLD!
Matt and Chuck just finished high
school!
It looks like they are in very good shape
because their dad’s are hooking them
up!
Matt’s dad is giving him $20,000 to put
in a savings account
Chuck’s dad is giving him $20,000 to
invest in mutual funds.
Matt’s situation is even better! His dad is
going to put another $20,000 in EACH
and EVERY year until he retires!
Who would you rather be?
10 Year Reunion
•
Matt and Chuck compare
notes! Matt’s savings
account is now worth
$201,723. Chuck’s
investment has grown to
$51,875.
•
Chuck is still feeling
cheated! At least he had
fun at the reunion!
20 Year Reunion
Once again, Matt and
Chuck have an
opportunity to catch up
and compare notes!
Matt’s savings account
is now worth a
whopping $408,466.
Chuck’s investment is
now worth $134,550!
He’s still way behind!
30 year reunion
Wow! It’s been 30 years!
How time flies!
Matt and Chuck are reunited
once again!
Although it seemed
unnecessary, Matt and
Chuck compared notes.
Matt’s savings account is
now worth $618,922.
Chuck’s initial $20,000 is
now worth $348,988.
Chuck is still behind!
40 Year Reunion?
Retirement?
Don’t worry, there wasn’t a 40 year reunion!
But when it was time for retirement at the
age of 65 Chuck did give Matt a call.
They ended up talking about their
graduation gifts.
After 47 years what were each of them
worth?
Matt?
Matt’s savings
account is now
worth $986,492.
All of this came
out of his father’s
pocket, year after
year.
What about Chuck?
His dad gave him the
initial $20,000 and
never put another
penny in the account.
What is this investment
worth after 47 years?
Chuck’s investment is
now worth an amazing
$1,763,950!
WOW!