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If you don't rate your chances of winning a million on a TV quiz show, check out this arithmetic instead.

 

Just suppose you saved £100 a month for 15 years. Without interest this would give you £18,000. But with interest compounded monthly at the rate of 6%, that would be worth £29,082.

 

Example table showing examples of interest

Time Passed	0% interest	4% interest	6% interest	8% interest
5 years	6,000	6,623	6,977	7,355
10 years	12,000	14,694	16,388	18,355
15 years	18,000	24,529	29,082	34,727
20 years	24,000	36,513	46,204	59,196
25 years	30,000	51,117	69,299	95,723
30 years	36,000	68,912	100,452	150,252
Total interest	0	32,912	64,453	114,252

 

Everyone over 18 has a £7000 allowance each year for tax-free saving through ISAs.

 

More on Managing Your Money:

Educational Maintenance Allowance

When Will I Be A Millionaire?

 

 

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