The Question 6 in 10 Adults Get Wrong

When you see illustrations of money growing over time, most models show a straight, steady climb. But most people know that markets fluctuate over time.

The question almost everyone gets wrong

The 2026 TIAA Institute-GFLEC Personal Finance Index asked U.S. adults a straightforward scenario: someone owes $1,000 on a loan at 20 percent annual interest, compounded yearly, with no payments made. How long would it take for that debt to double? The correct answer is less than five years. Only 40 percent of U.S. adults got it right.¹

The miscalculation isn't about the 20 percent. It's about compounding itself. Simple growth adds the same dollar figure every year. Compounding folds each year's growth into the balance, so next year's growth is calculated on a bigger number. The base keeps expanding, and the growth on top of it expands right along with it.

What This Means for You

How compounding behaves over a decade or two is easy to underestimate, and the research suggests most people do exactly that. Do you have realistic expectations? 

^{1. TIAA.org, June 2026}