|
year |
Joe |
|
Frank |
|
year |
Joe |
|
Frank |
|
1 |
2,000 |
|
0 |
|
21 |
72,055 |
|
55,950 |
|
2 |
4,200 |
|
0 |
|
22 |
79,261 |
|
63,545 |
|
3 |
6,620 |
|
0 |
|
23 |
87,187 |
|
71,899 |
|
4 |
9,282 |
|
0 |
|
24 |
95,905 |
|
81,089 |
|
5 |
12,210 |
|
0 |
|
25 |
105,496 |
|
91,198 |
|
6 |
15,431 |
|
0 |
|
26 |
116,045 |
|
102,318 |
|
7 |
18,974 |
|
0 |
|
27 |
127,650 |
|
114,550 |
|
8 |
20,872 |
|
2,000 |
|
28 |
140,415 |
|
128,005 |
|
9 |
22,959 |
|
4,200 |
|
29 |
154,456 |
|
142,805 |
|
10 |
25,255 |
|
6,620 |
|
30 |
169,902 |
|
159,086 |
|
11 |
27,780 |
|
9,282 |
|
31 |
186,892 |
|
176,995 |
|
12 |
30,558 |
|
12,210 |
|
32 |
205,581 |
|
196,694 |
|
13 |
33,614 |
|
15,431 |
|
33 |
226,140 |
|
218,364 |
|
14 |
36,976 |
|
18,974 |
|
34 |
248,754 |
|
242,200 |
|
15 |
40,673 |
|
22,872 |
|
35 |
273,629 |
|
268,420 |
|
16 |
44,741 |
|
27,159 |
|
36 |
300,992 |
|
297,262 |
|
17 |
49,215 |
|
31,875 |
|
37 |
331,091 |
|
328,988 |
|
18 |
54,136 |
|
37,062 |
|
38 |
364,200 |
|
363,887 |
|
19 |
59,550 |
|
42,769 |
|
39 |
400,620 |
|
402,276 |
|
20 |
65,505 |
|
49,045 |
|
|
|
|
|
Let’s carry this a bit further. Suppose that Joe was investing $2000 each year until he was 65. At age 70 Frank would have a nest egg of a million dollars, while Joe had almost two times that. Getting the head start made a colossal difference. The key is to start investing as early as possible to take full advantage of compound interest.
Joe and Frank were cordial for years after graduation. One day in June, Joe told his friend he’d give his friend a million bucks if Frank would give him one cent the first day of the following month, then two cents the next and doubling the amount until the end of the month. Frank asked why not. As you might expect, here’s another table with all the dirty details.
|
1 |
$0.01 |
|
11 |
$10.24 |
|
21 |
$10,485.76 |
|
2 |
$0.02 |
|
12 |
$20.48 |
|
22 |
$20,971.52 |
|
3 |
$0.04 |
|
13 |
$40.96 |
|
|