Saving Over Time

INVESTMENT compounding over long periods can produce impressive results—but the results are even more impressive when you couple that compounding with regular savings. For instance, if you invest $100 initially and left it to grow at 5% a year, you would have $339 after 25 years, thanks to the 239% cumulative gain. But if you invested $100 at the start of each of the 25 years, for a total of $2,500, you would have $5,011 after 25 years.

You can do this calculation with Excel or with a financial calculator, such as Texas Instruments Business Analyst II Plus (TI-BA II Plus). Alternatively, you could use an online savings calculator, such as the compound savings calculator at or the finance calculator available at

One warning: Pay attention to when additional savings are credited. You end up with a lower accumulated value if additional savings are credited at the end of each year, rather than at the beginning, because that means those savings miss out on a year of investment gains.

Next: Gains Over Time

Previous: Taxables vs. Munis

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8 months ago

Besides online calculators and spreadsheets, another option for time value of money (TVM) calculations is the TI-84 graphing calculators widely used in schools. Easy for students to explore real examples of compound interest. Press apps > 1:Finance and choose the TVM or related variations. The finance and other apps are either included with the calculator or downloadable for free from the TI website, as is the user guide.

Bob Wilmes
Bob Wilmes
1 year ago

I’ve got to put the plug in for my venerable Hewlett-Packard HP 12C financial calculator. Once you learn these, it will be a lifelong help to any financial calculations.

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