1 2 The Power of Compounding Interest Who will have more money at age 65? Sarah's initial contribution is made at the beginning of age 19. Her last contribution is at age 26. Anthony's initial contribution is made at the beginning of age 40. 3 4 Notes: 5 6 7 8 9 Anthony's final contribution occurs at the beginning of age 65 with one year of compounding left. The final value is the value at the end of age 65. Interest is compounded annually at a rate of 5 percent. Yearly Contribution Yearly Interest 11 Age (at Beginning) (End of Year) Sarah's RRSP (End of Year) Beginning) Yearly Contribution (at Yearly Interest Anthony's RRSP (End of Year) (End of Year) 12 13 14 15 16 17 18 19 22222222 $2,000.00 $2,000,00 $2,000.00 $2,000,00 $2,000,00 $2,000,00 $2,000,00 $2,000.00 1 2 3 4 Notes: 5 The Power of Compounding Interest Who will have more money at age 65? Sarah's initial contribution is made at the beginning of age 19. Her last contribution is at age 26. 6 Anthony's initial contribution is made at the beginning of age 40. 7 8 9 Anthony's final contribution occurs at the beginning of age 65 with one year of compounding left. The final value is the value at the end of age 65. Interest is compounded annually at a rate of 5 percent. Yearly Contribution 11 Age (at Beginning) 22222222 20 27 21 28 29 23 24 31 25 26 27 34 2233233 Yearly Interest (End of Year) Sarah's RRSP (End of Year) Beginning) Yearly Contribution (at Yearly Interest Anthony's RRSP (End of Year) (End of Year) 1 The Power of Compounding Interest Who will have more money at age 65? Sarah's initial contribution is made at the beginning of age 19. Her last contribution is at age 26. 2 3 4 Notes: 5 6 7 8 9 Anthony's initial contribution is made at the beginning of age 40. Anthony's final contribution occurs at the beginning of age 65 with one year of compounding left. The final value is the value at the end of age 65. Interest is compounded annually at a rate of 5 percent. Yearly Contribution 11 Age (at Beginning) 28 35 29 36 30 37 31 38 32 39 33 40 34 41 35 42 Yearly Interest (End of Year) Sarah's RRSP (End of Year) Yearly Contribution (at Yearly Interest Anthony's RRSP Beginning) (End of Year) (End of Year) $2,000,00 $2,000.00 $2,000,00 1 2 The Power of Compounding Interest Who will have more money at age 65? Sarah's initial contribution is made at the beginning of age 19. Her last contribution is at age 26. 3 4 Notes: 5 6 7 8 9 Anthony's initial contribution is made at the beginning of age 40. Anthony's final contribution occurs at the beginning of age 65 with one year of compounding left. The final value is the value at the end of age 65. Interest is compounded annually at a rate of 5 percent. Yearly Contribution 11 Age (at Beginning) 36 43 37 44 38 45 39 46 40 47 41 48 42 49 43 50 Yearly Interest (End of Year) Sarah's RRSP (End of Year) Yearly Contribution (at Beginning) Yearly Interest Anthony's RRSP (End of Year) (End of Year) $2,000.00 $2,000,00 $2,000.00 $2,000.00 $2,000.00 $2,000.00 $2,000.00 $2.000.00 1 The Power of Compounding Interest Who will have more money at age 65? Sarah's initial contribution is made at the beginning of age 19. Her last contribution is at age 26. 2 3 4 Notes: 5 6 7 8 9 Anthony's initial contribution is made at the beginning of age 40. Anthony's final contribution occurs at the beginning of age 65 with one year of compounding left. The final value is the value at the end of age 65. Interest is compounded annually at a rate of 5 percent. Yearly Contribution 11 Age (at Beginning) 44 45 46 47 48 49 50 51 51 52 53 54 55 56 57 58 Yearly Interest (End of Year) Sarah's RRSP (End of Year) Yearly Contribution (at Yearly Interest Anthony's RRSP Beginning) (End of Year) (End of Year) $2,000.00 $2,000.00 $2,000.00 $2,000.00 $2,000.00 $2,000.00 $2,000,00 $2,000.00 1 The Power of Compounding Interest Who will have more money at age 65? Sarah's initial contribution is made at the beginning of age 19. Her last contribution is at age 26. 2 3 4 Notes: 5 6 7 8 9 Anthony's initial contribution is made at the beginning of age 40. Anthony's final contribution occurs at the beginning of age 65 with one year of compounding left. The final value is the value at the end of age 65. Interest is compounded annually at a rate of 5 percent. Yearly Contribution 11 Age (at Beginning) 52 59 53 60 54 61 55 62 56 63 57 64 58 65 Yearly Interest (End of Year) Sarah's RRSP (End of Year) Yearly Contribution (at Yearly Interest Anthony's RRSP Beginning) (End of Year) (End of Year) $2,000.00 $2,000.00 $2.000.00 $2,000.00 $2,000.00 $2,000.00 $2,000.00 1 The Power of Compounding Interest Who will have more money at age 65? Sarah's initial contribution is made at the beginning of age 19. Her last contribution is at age 26. 2 3 4 Notes: 5 6 7 8 9 Anthony's initial contribution is made at the beginning of age 40. Anthony's final contribution occurs at the beginning of age 65 with one year of compounding left. The final value is the value at the end of age 65. Interest is compounded annually at a rate of 5 percent. Yearly Contribution 11 Age (at Beginning) Final Value of 59 RRSP 60 Total Contribution 61 Total Interest Yearly Interest (End of Year) Sarah's RRSP (End of Year) Yearly Contribution (at Yearly Interest Anthony's RRSP Beginning) (End of Year) (End of Year)