The document outlines the concept of compound interest, emphasizing its power in saving and investing by demonstrating how initial investments grow over time with interest on interest. It illustrates the significant financial advantage of starting to save early, comparing the outcomes of two individuals who begin saving at different ages. Additionally, it offers tips for maximizing compound interest, such as leaving investments untouched and contributing frequently.

1. “Your logo could be here instead!”
CREDIT UNION
YOUR
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Compound Interest
MIND BEND

2. “Compound interest is
the eighth wonder of the world.
He who understands it, earns it…
He who doesn’t, pays it…”
– Albert Einstein

3. Compound interest =
earning interest on your interest.

4. It is one of the most powerful
concepts in saving and investing.

5. Over time, compound interest
accelerates your savings.

6. You invest $100 with an annual return of 5% .
initial deposit or
principal
interest
rate
EXAMPLE

7. EXAMPLE
Simple Interest Compound Interest
Initial deposit $100 $100.00
after 1 year $105 $105.00
after 2 years $110 $110.25
after 3 years $115 $115.76
after 4 years $120 $121.55
after 5 years $125 $127.63

8. EXAMPLE
Simple Interest Compound Interest
Initial deposit $100 $100.00
after 1 year $105 $105.00
after 2 years $110 $110.25
after 3 years $115 $115.76
after 4 years $120 $121.55
after 5 years $125 $127.63
same amount of interest every year
+$5.00
+$5.00
+$5.00
+$5.00
+$5.00

9. EXAMPLE
Simple Interest Compound Interest
Initial deposit $100 $100.00
after 1 year $105 $105.00
after 2 years $110 $110.25
after 3 years $115 $115.76
after 4 years $120 $121.55
after 5 years $125 $127.63
+$5.00 +$5.00
+$5.00 +$5.25
+$5.00 +$5.51
+$5.00 +$6.08
+$5.00 +$5.79
interest increases every year

10. How to make the most of
COMPOUND INTEREST

11. Start saving now.

12. Time is a huge factor that
can maximize the benefits
of compound interest.

13. So how much difference
does a head start make?

14. EINSTEIN BLIPPY
“There’s no time
to lose!”
“I can always
start saving later.”
VS.

15. Starts saving at 25 Starts saving at 35
$1,000 initial deposit
$1,200 annual deposit
5% annual return
$1,000 initial deposit
$1,200 annual deposit
5% annual return
$
5
0 10 15 20
YEARS 25 30 35
Einstein gets a
10-year head start
Blippy starts
saving 10 years
after Einstein
$29,659
$70,900

16. Starts saving at 25 Starts saving at 35
$1,000 initial deposit
$1,200 annual deposit
5% annual return
$1,000 initial deposit
$1,200 annual deposit
5% annual return
Einstein contributed
$12,000 more than Blippy...
...but earned $41,241
more in total interest!
$70,900
Same
initial
deposit of
$1,000
$42,000
$30,000 $29,659

17. Does starting early matter if you
contribute less money overall?

18. contributes annually for the first
10 YEARS ONLY
(and then stops)
contributes annually for the
ENTIRE 25 YEARS
of his investment
total interest earned: total interest earned:
EINSTEIN BLIPPY
starts saving at 25 starts saving at 35
(that’s $12,000 of
his own money)
(that’s $30,000 of
his own money)
$43,627 $29,659
$1,200
annual contribution
$1,200
annual contribution
BY AGE 60

19. Simply by starting early,
Einstein was able to contribute
$18,000 less but still make almost
$14,000 more in interest!

20. Bonus Tips for
COMPOUND INTEREST

21. Leave your money alone.
Withdrawing interest
as you earn it minimizes
the compounding effect.

22. Contribute often.
If your investment
compounds monthly,
small, more frequent
deposits are better than
larger annual deposits.
TUE

23. INVESTING CAN BE RISKY
Not all investments are guaranteed—
some investments carry the risk of losing
money, even when made through a
financial advisor or financial institution

24. “Your logo could be here instead!”
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