At 18 years old, starting at $0, you begin saving $100 per month, with a 10% annual return. If you wait to start saving the same amount until you are 22 (after graduating college), how much less do you have at age 65?

9514 1404 393

  $425,140.62

Step-by-step explanation:

It is generally helpful to use a financial calculator, graphing calculator, or spreadsheet to make these financial calculations.

The number of years is 65 -18 = 47, or 65 -22 = 43. The number of times interest is compounded in a year is 12. We assume that deposits are made at the end of the month.

starting at 18: $1,281,919.73 after 47 years

starting at 22: $856,779.11 after 43 years

The difference is ...

  $1,281,919.73 -856,779.11 = $425,140.62

At age 65, you have about $425,140.62 less.