If I asked you this question, “What did Albert E. Einstein consider the greatest invention of the twentieth century?” What would you say? Some might reply automobiles, televisions, or how about computers. All these replies were great inventions that revolutionized society as we know it today, yet none of these is the correct answer. Albert Einstein considered, “the calculation of Compound Interest (aka the power of compounding) as the twentieth century's greatest gift.
Calculating Compound Interest
Start off with $1,000 and save an additional $1,000 for 40 years. Achieve an annual return of 9% through stocks, bonds, and other interest yielding investments and in forty years, your initial investment of only $41,000 will grow to over $237,000. The key to investing is time, not dollar amounts or get rich quick schemes. We live in a completely balanced universe where time is the most valuable asset you can possess. Give your money some time and watch your retirement nest egg grow.
For more fun with compound interest, check out CNN Money Savings Calculator