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title
Retirement Plans – The power of compounding
excerpt
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Compounding can be a powerful engine for account growth When you deposit money in a bank account, the bank promises to periodically pay you a certain percentage of that money in exchange for letting it use the money you deposited. The money the bank pays you is called “interest.” Compound interest is the interest you earn on interest you’ve already been paid. Consider this example: If you deposit $1,000 in a bank account paying 5% interest each year, you’ll have $1,050 at the end of the first year. Assuming you keep your money and the interest you earned in your account, you’ll have $1,102.50 at the end of the second year. At the end of the third year, you’ll ...
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2026-01-05 16:20:35
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