Starting at age 25, and ending at age 65: If you contribute $120 per week to an account earning 6% annual interest, compounded annually, for 40 years, you would have $1,032,891.92 at the end of that period. Here are the details:
Initial Investment: $0
Weekly Contribution: $120
Annual Interest Rate: 6%
Number of Years: 40
Compounding Frequency: Annually With these inputs, the total contributions over 40 years would be $249,600 (40 years x 52 weeks x $120). The interest earned on those contributions at 6% per year would be $783,291.92. Therefore, the total future value of the account after 40 years would be $1,032,891.92, which is the sum of the total contributions ($249,600) and the total interest earned ($783,291.92). The power of compound interest over such a long period, combined with consistent weekly contributions, allows the money to grow significantly.
Contributing regularly and letting the interest compound are key factors in building substantial savings over time.
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