Time and Growth of Money

Time is a vital factor in accumulating wealth. The following tables illustrate the effect of time and after-tax interest in accumulating funds.

Growth of a Single Lump-Sum. Investment

Years of Growth $10,000 Compounded at 6% 10% 5 $13,382 $16,105 10 $17,908 $25,937 15 $23,966 $41,772 20 $32,071 $67,275 25 $42,919 $108,347 30 $57,435 $174,494 35 $76,861 $281,024 40 $102,857 $452,593

In other words, in a period 8 times longer (40 years rather than 5 years) the investment result at 10% is 28 times greater growth ($452,593 divided by $16,105).

Growth of a Fund to Which $3,000 Is Added' at the Beginning of Each Year

$3,000 per Year at 6% Total Contributed Will Grow to Growth Percent Increase 5 $15,000 $17,926 $2,926 20% 10 $30,000 $41,915 $11,915 40% 15 $45,000 $74,018 $29,018 64% 20 $60,000 $116,978 $56,978 95% 25 $75,000 $174,469 $99,469 133% 30 $90,000 $251,405 $161,405 179% 35 $105,000 $354,363 $249,363 237% 40 $120,000 $492,143 $372,143 310%

These tables assume a 6% rate of return after taxes and that the earnings are reinvested.

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¹ The examples shown are hypothetical and the actual growth will depend on many factors.