Compound Interest Guide
Compound Interest Examples
Walk through simple examples that show how time, rate, and contributions affect compound growth.
In this guide
Example with one deposit Example with monthly contributions Example with different ratesExample with one deposit
A single $1,000 deposit at 5% annual growth becomes $1,050 after one year before taxes and fees. If the interest stays in the account, the second year begins with $1,050.
That is the simplest version of compounding.
Example with monthly contributions
If someone adds $100 every month, the account grows from both deposits and interest. Early contributions have more time to compound than later ones.
This is why recurring contributions can have a powerful long-term effect.
Example with different rates
At a lower rate, the final balance may depend more on personal contributions. At a higher rate, investment growth may become a larger share of the result.
The rate range scenario panel helps users compare these differences.