Did the ant and the grasshopper both retire comfortably?
“When Alice and Bob were both 19 years old they started new jobs. Alice started a savings programme, investing £1000 at the beginning of each year at 10% per annum. At the end of 7 years her account shows a total of £10435.89. Bob, who has not saved a penny until now, is impressed by the size of Alice’s nest egg, and decides to start investing in the same way. Alice decides not to put any more into her account, just letting it grow at 10% per annum. Bob is determined to build up his investment until it is bigger than Alice’s. How long will it take for Bob’s investment to overtake Alice’s? The astonishing answer is that it will take 32 years” From “Have we caught your interest” which deals with some of the mathematics behind compound interest – including those used to calculate the above example. Don’t leave knowledge of this stuff entirely to bankers. The amount of money you will need for retirement is determ
