Forum Archive Index - February 2003

[prhughes@value.net.nz]

Hi

I was bemused by all the noise about financial planning a short 
while ago. Perhaps the following may be of interest to you, as old 
as the hills,and something you can do at no cost to youself. If you 
use Govt Stock it is probably the safest investment you will find.

Preparing for retirement .....from age 19 for a total cost of $14,000 
for a return of $930,644. The secret...compounding interest.

For simplicity a rate of 10% per annum is used.

Age             Contribution    Year End Value
19                      2000                    2200
20                      2000                    4620
21                      2000                    7282
22                      2000                    10210
23                      2000                    13431
24                      2000                    16974
25                      2000                    20872
26                      0                               22959
27                      0                               25255
28                      0                               27780
65                      0                               944641
Less Invested                           (14000)
Equals                                          $930,641

After seven years makes no more contributions.

He who understands interest..........Earns it

He who doesn't understand interest........Pays it

Bill    

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