See how a portfolio grows over time with regular contributions and compounding returns.
| Year | Contributions | Interest | Balance |
|---|---|---|---|
| 1 | $16,000 | $955 | $16,955 |
| 2 | $22,000 | $2,413 | $24,413 |
| 3 | $28,000 | $4,411 | $32,411 |
| 4 | $34,000 | $6,986 | $40,986 |
| 5 | $40,000 | $10,182 | $50,182 |
| 6 | $46,000 | $14,042 | $60,042 |
| 7 | $52,000 | $18,614 | $70,614 |
| 8 | $58,000 | $23,952 | $81,952 |
| 9 | $64,000 | $30,108 | $94,108 |
| 10 | $70,000 | $37,144 | $107,144 |
| 11 | $76,000 | $45,122 | $121,122 |
| 12 | $82,000 | $54,110 | $136,110 |
| 13 | $88,000 | $64,182 | $152,182 |
| 14 | $94,000 | $75,416 | $169,416 |
| 15 | $100,000 | $87,895 | $187,895 |
| 16 | $106,000 | $101,710 | $207,710 |
| 17 | $112,000 | $116,958 | $228,958 |
| 18 | $118,000 | $133,742 | $251,742 |
| 19 | $124,000 | $152,173 | $276,173 |
| 20 | $130,000 | $172,370 | $302,370 |
Compound interest is interest that earns interest. Each period, your return is applied to the entire balance — including the interest you've already earned. Over decades, this is what turns small contributions into meaningful wealth.
Compounding frequency matters at the margins. Daily compounding gives a slightly higher result than annual at the same nominal rate, but the difference is usually small. What dominates the final number is time and contribution discipline.
Inflation erodes purchasing power. A 7% nominal return at 3% inflation is about 3.9% real — what you can actually buy with the money. Toggle the inflation adjustment on to see both numbers side-by-side.
Formula: for each period, balance = (balance + contribution) × (1 + rate / periods). Repeated over years. The chart and table simulate this step-by-step rather than using a closed-form formula, so you can see exactly how each year builds on the last.