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Originally Posted by pentoman
Thanks for the replies.
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err by the way, can someone please explain compound interest? How do I make it "work for me"?  
thanks, my most smart and knowledgeable friends!
Russell |
Future value = P(1 + r)^n
P = principle (the amount you start with)
r = interest rate (decimal value ie 5% = 0.05)
n = number of years
So let's start with $20K and you will retire at age 65 (43 years hence) and you don't invest any more money ino that account (keeping it easy) and it returns a modest 7%.
FV = 20,000 * (1 + 0.07)^43
FV = about $370,000
So, would you like a third of a million bucks when you retire or a cute car now?