See how your money grows with compound interest and regular contributions.
$6,000/year in contributions
| Year | Total Contributed | Investment Growth | Balance |
|---|---|---|---|
| Year 1 | $16,000 | $955 | $16,955 |
| Year 2 | $22,000 | $2,413 | $24,413 |
| Year 3 | $28,000 | $4,411 | $32,411 |
| Year 4 | $34,000 | $6,986 | $40,986 |
| Year 5 | $40,000 | $10,182 | $50,182 |
| Year 6 | $46,000 | $14,042 | $60,042 |
| Year 7 | $52,000 | $18,614 | $70,614 |
| Year 8 | $58,000 | $23,952 | $81,952 |
| Year 9 | $64,000 | $30,108 | $94,108 |
| Year 10 | $70,000 | $37,144 | $107,144 |
| Year 11 | $76,000 | $45,122 | $121,122 |
| Year 12 | $82,000 | $54,110 | $136,110 |
| Year 13 | $88,000 | $64,182 | $152,182 |
| Year 14 | $94,000 | $75,416 | $169,416 |
| Year 15 | $100,000 | $87,895 | $187,895 |
| Year 16 | $106,000 | $101,710 | $207,710 |
| Year 17 | $112,000 | $116,958 | $228,958 |
| Year 18 | $118,000 | $133,742 | $251,742 |
| Year 19 | $124,000 | $152,173 | $276,173 |
| Year 20 | $130,000 | $172,370 | $302,370 |
| Rate | Final Balance | Growth | Multiple |
|---|---|---|---|
| 3% p.a. | $182,769 | $52,769 | 1.4× |
| 5% p.a. | $233,500 | $103,500 | 1.8× |
| 7% p.a. | $302,370 | $172,370 | 2.3× |
| 9% p.a. | $396,540 | $266,540 | 3.1× |
| 12% p.a. | $608,499 | $478,499 | 4.7× |
Compound interest is often called the “eighth wonder of the world.” Unlike simple interest, compound interest earns returns on your returns — so your money grows exponentially over time.
The key variables are time and rate. A 1% difference in return rate — say 7% vs 8% — makes a massive difference over 30 years. That's why choosing low-fee index funds (0.1% p.a.) over managed funds (1.5% p.a.) can add hundreds of thousands to your final balance.
Regular contributions are equally powerful. Adding $500/month to an investment growing at 7% for 30 years produces a balance of nearly $600,000 — even though you only contributed $180,000. The remaining $420,000 is pure compound growth.