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As an instance that at age 12 you won $500 in a raffle. As an alternative of using that $500 to buy a sport console and video games, you set that cash in a savings account that earned 5 percent curiosity. In actuality, that interest price will fluctuate over time, however for our functions, to illustrate it stays a continuing 5 percent. At the top of five years, you will have $638.14. At age 25, you’ll have practically double your preliminary funding: $942.82. By the time you’re 40, that $500 would have was $1,960.06.
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