Compound Interest, Visualized

The 8th wonder

Compound interest is interest earning interest. Its formula is **FV = P(1 + r/n)^(nt)**. What matters isn't the equation — it's the exponent. Time is the dominant variable.

A story in three decades

Invest $10,000 at 8% and add nothing. After 10 years you have $21,600 — a nice double. After 20 years, $46,600. After 30 years, $100,600. The third decade added more dollars than the first two combined, because you're now earning 8% on a much larger base.

Contributions supercharge it

Add $300 monthly and the same 30 years turns into roughly $440,000. Your out-of-pocket is $118,000. The other $322,000 is what compounding did while you slept.

The cost of waiting

Every year you delay isn't a linear loss — it's exponential. Starting at 25 instead of 35 typically doubles your final balance for the same monthly contribution.

Reasonable expectations

Historical stock returns are around 7% after inflation. Use conservative numbers in a compound interest calculator; upside surprises are fun, but planning around them isn't.