Why compound interest explodes

Put money in once and leave it. The interest you earn starts earning its own interest — and that small loop, repeated, is the difference between a straight line and a launch.

Below: the flat line is the cash you actually put in. The curved line is what it becomes. Drag the controls and watch the gap between them open up.

balance after 30 years

You paid in Balance

Monthly contribution $200

Years invested 30

Annual return 7%

Notice the shape. For the first years the two lines barely separate — your balance is mostly just the cash you added. Then the curve lifts off the straight line and keeps pulling away. That bend is compounding: the longer the money sits, the more of your balance is growth rather than contributions.

What makes that curve bend upward over time?

Try setting the return to 1% — the curve nearly flattens into the straight line. That gap is compounding. Curious how fees quietly eat it, or how starting 5 years earlier compares? Ask me in the chat.

Primary source · Investor.gov (U.S. SEC) — Compound Interest Calculator