Final balance
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You put in
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Interest earned
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See how a starting amount plus regular deposits grows over time.
Compound interest is interest earned on your interest. Instead of only the original amount (the principal) earning returns, each period's interest is added to the balance so the next period earns a little more, and the growth snowballs. The formula is A = P(1 + r/n)nt, where P is the starting amount, r is the annual rate, n is how many times a year it compounds, and t is the number of years. Add regular contributions and the effect is stronger still.
Time is the real driver. Because the growth is exponential, the years at the end matter far more than the years at the start. Someone who invests for 40 years rather than 30 does not get a third more; they often get roughly double, because the biggest compounding happens on the largest balance near the end. That is why starting early beats investing more later.
A quick rule. The Rule of 72 estimates how long money takes to double: divide 72 by the annual percentage rate. At 8% a year, money doubles in about nine years; at 4%, about eighteen. Use the calculator above to model your own principal, rate, contributions and timeframe, and try changing just the number of years to see how much the ending matters.