How compound interest grows
Interest earns interest. The gap between what you put in and what you end up with is the whole idea - move the sliders and watch it open.
How compound interest grows — the interactive part
Balance
Years from today
This chart as text
- You put in: £5,000 at the start, £35,000 halfway, £65,000 at year 25.
- Growth: £0 at the start, £24,717 halfway, £125,641 at year 25.
- Bands are stacked, so the top of the stack is the total.
Balance after 25 years is £190,641. You put in is £65,000, Starting amount plus every monthly deposit. Growth is £125,641, 66% of the final balance.
Why the line bends
Simple interest pays you on the starting amount forever, so it draws a straight line. Compound interest pays you on the balance - including the interest already paid - so each year starts from a bigger number than the last. The curve is not the rate getting better. It is the same rate applied to more money.
What this model assumes
The return is a nominal annual rate: 7% added monthly means 0.583% a month, which is why 'Interest added: monthly' finishes ahead of 'yearly' at the same rate. Deposits land at the end of each month and start earning from the next full compounding period, so the last one you make earns nothing. No inflation, tax or fees.
Check your understanding
You save for 25 years. Roughly when does growth overtake what you put in?
Pick one to check yourself.