Savings and Credit Interest

William, starts saving $4,000 a year (about $333.33 per month) when he is 20 and stops after 20 years, after having saved $80,000

Interest earned during the time he is putting money into his account $155,244.76

His brother, James, starts saving $4,000 at 40, and does so for 25 years, for a total of $100,000 saved.

Interest earned during the time he is putting money into his account $231,653.79

They earn 6% on their savings.

At age 65, William will have $666,000 in his account, while James will have  $231,653.79 . Despite having saved less, William's nest egg will be almost four times greater because of compounding