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Compound Interest

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Money Growing

As a teen, it is the best time for you to leverage compound interest! Compound interest is when you earn interest upon interest (or just growing your portfolio exponentially)! One way to gain compound interest over time is by investing in the stock market. Historically, the average return for the stock market is about ten percent. This would mean that if you invested ten dollars every month in an index fund, such as the S&P 500 (average 12% return), when you were 16, then you could have over $14,000 by the time you turn 40.

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Compound interest can be calculated using the following formula:

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A = P ( 1 + r / n ) ^ n * t

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Where...

A = final amount

P = initial principal balance

r = interest rate

n = number of times interest applied per time period

t = number of time periods elapsed

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Another option is to simply search up “Compound Interest Calculator” on Google and input your respective numbers from there to visualize how much compound interest would help you grow.

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Simply, starting early will make it easier for you to grow your portfolio quicker and at a higher rate over time. Here at Bumper, we make it easy for you to start investing early and gaining compound interest by catering our platform specifically to teens like you! We encourage you to start today on your investing journey and look forward to seeing you grow!

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Disclosure: This article is solely for informational purposes only. Bumper does not recommend any specific investments or investment strategies. Investments in securities involve the risk of losses and past performance does not guarantee future results. Before investing you should carefully consider your investment objectives, time horizon, and overall risk tolerance as well as the information stated in the product offering prospectuses.

All investments involve risk and the past performance of a security, or financial product does not guarantee future results or returns. Keep in mind that while diversification does not assure a profit, or protect against loss. There is always the potential of losing money when you invest in securities, or other financial products. Investors should consider their investment objectives and risks carefully before investing.
Disclosure: Alpaca does not make recommendations with regard to fractional share trading, whether to use fractional shares at all, or whether to invest in any specific security. A security's eligibility on the list of fractional shares available for trading is not an endorsement of any of the securities, nor is it intended to convey that such stocks have low risk. Fractional share transactions are executed either on principal or riskless principal basis, and can only be bought or sold with market orders during market orders.

Investing 101

1

Risks and Rewards of Investing

2

How to Begin Investing as a Teen - Step by Step

3

Stocks and Shares

4

ETFs

5

Stock Market

6

Stock Exchanges

7

IPO

8

Long & Short

9

Realized & Unrealized Gains

10

Capital Gains

11

Taxes on Investments

12

Diversification

13

Market Cap

14

Dividends

15

Fractional Shares

16

Stock Indexes

17

Index Funds

18

Fundamental Analysis

20

Ratio Analysis

20

Key Statistics in Bumper

21

Benchmark Analysis

22

Technical Analysis

23

How to Pick a Stock

24

Dollar-Cost Averaging

25

Value Investing as a Teen

26

Growth Investing as a Teen

27

Momentum Investing

28

What is Cryptocurrency?

30

History of Cryptocurrency

31

Meme Stocks

31

NFTs

32

Blockchain

32

Initial Coin Offering

40

Compound Interest

41

Equip Solutions, Inc. ("Bumper") and Alpaca Securities LLC ("Alpaca") are not affiliated and neither are responsible for the liabilities of the other.

Technology is offered by Equip Solutions, Inc.

Brokerage services are provided by Alpaca Securities LLC ("Alpaca”), member FINRA, a wholly-owned subsidiary of AlpacaDB, Inc. Clearing services are provided by Velox Clearing LLC (Velox) and Vision Financial Markets LLC (Vision). All three are members of the Securities Investor Protection Corporation (SIPC), which protects securities customers of its members up to $500,000 (including $250,000 for claims for cash) per customer. Explanatory brochure available upon request or at www.sipc.org.

This is not an offer, solicitation of an offer, or advice to buy or sell securities, or open a brokerage account in any jurisdiction where Alpaca is not registered (Alpaca is registered only in the United States).

View Alpaca's disclosures at: https://alpaca.markets/disclosures

Alpaca does not make recommendations with regard to fractional share trading, whether to use fractional shares at all, or whether to invest in any specific security. A security’s eligibility on the list of fractional shares available for trading is not an endorsement of any of the securities, nor is it intended to convey that such stocks have low risk. Fractional share transactions are executed either on a principal or riskless principal basis, and can only be bought or sold with market orders during normal market hours.
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The content on this website is for illustrative and informational purposes only and any historical returns, expected returns or projections are hypothetical in nature. Investing involves risk & investments may lose value, including the loss of principal. Past performance does not guarantee future returns or results. Before investing, carefully consider your investment objectives, time horizon, and overall risk tolerance as well as the information stated in the product offering prospectuses.