Compound interest is the difference between the cash you contribute to an investment and the actual future value of the investment. In this case, by contributing just $45,000 per year with the annual contribution being increased by 3% per year (cumulative contributions of $2,031,934) you are able to accumulate $1.4962988E7 over 27 years. Compound interest makes up $1.2931054E7 of your future balance. <div id="chart1Container">Chart will load here</div> <script type="text/javascript">  </script> <ul><li><a href="inv01">How should I allocate my assets?</a></li><li><a href="inv02">Compare taxable vs. tax-free investment return</a></li><li><a href="inv03">What is the value of a bond?</a></li><li><a href="inv04">What is the return on my real estate investment?</a></li><li><a href="interest-calculator">What is the value of compound interest?</a></li><li><a href="inv06">What is the value of a call or put option?</a></li><li><a href="inv07">Taxable vs. tax-advantaged savings?</a></li><li><a href="inv08">What is my risk tolerance?</a></li><li><a href="inv09">What is the long-term impact of increased investment return?</a></li><li><a href="inv10">Certificate of deposit (CD) analyzer</a></li><li><a href="what-is-the-dividend-yield-on-a-stock">What is the dividend yield on a stock?</a></li><li><a href="inv12">How do expenses impact mutual fund returns?</a></li><li><a href="certificate-of-deposit-cd-laddering-strategy">Certificate of deposit (CD) laddering strategy</a></li><li><a href="share-certificate-analyzer">Share Certificate analyzer</a></li><li><a href="share-certificate-laddering">Share Certificate laddering strategy</a></li></ul><table class='pure-table pure-table-bordered' role='grid'><tr><th scope="col">Year</th><th scope="col">Beginning Balance</th><th scope="col">Savings @ 3.00%</th><th scope="col">Interest @ 12.00%</th><th scope="col">Ending Balance</th></tr><tr><td role="rowheader" scope="row">1</td><td>$200,000</td><td>$45,000</td><td>$29,400</td><td>$274,400</td></tr><tr><td role="rowheader" scope="row">2</td><td>274,400</td><td>46,350</td><td>38,490</td><td>359,240</td></tr><tr><td role="rowheader" scope="row">3</td><td>359,240</td><td>47,740</td><td>48,838</td><td>455,818</td></tr><tr><td role="rowheader" scope="row">4</td><td>455,818</td><td>49,173</td><td>60,599</td><td>565,590</td></tr><tr><td role="rowheader" scope="row">5</td><td>565,590</td><td>50,648</td><td>73,949</td><td>690,186</td></tr><tr><td role="rowheader" scope="row">6</td><td>690,186</td><td>52,167</td><td>89,082</td><td>831,436</td></tr><tr><td role="rowheader" scope="row">7</td><td>831,436</td><td>53,732</td><td>106,220</td><td>991,389</td></tr><tr><td role="rowheader" scope="row">8</td><td>991,389</td><td>55,344</td><td>125,608</td><td>1,172,341</td></tr><tr><td role="rowheader" scope="row">9</td><td>1,172,341</td><td>57,005</td><td>147,521</td><td>1,376,867</td></tr><tr><td role="rowheader" scope="row">10</td><td>1,376,867</td><td>58,715</td><td>172,270</td><td>1,607,851</td></tr><tr><td role="rowheader" scope="row">11</td><td>1,607,851</td><td>60,476</td><td>200,199</td><td>1,868,527</td></tr><tr><td role="rowheader" scope="row">12</td><td>1,868,527</td><td>62,291</td><td>231,698</td><td>2,162,516</td></tr><tr><td role="rowheader" scope="row">13</td><td>2,162,516</td><td>64,159</td><td>267,201</td><td>2,493,876</td></tr><tr><td role="rowheader" scope="row">14</td><td>2,493,876</td><td>66,084</td><td>307,195</td><td>2,867,155</td></tr><tr><td role="rowheader" scope="row">15</td><td>2,867,155</td><td>68,067</td><td>352,227</td><td>3,287,448</td></tr><tr><td role="rowheader" scope="row">16</td><td>3,287,448</td><td>70,109</td><td>402,907</td><td>3,760,464</td></tr><tr><td role="rowheader" scope="row">17</td><td>3,760,464</td><td>72,212</td><td>459,921</td><td>4,292,596</td></tr><tr><td role="rowheader" scope="row">18</td><td>4,292,596</td><td>74,378</td><td>524,037</td><td>4,891,011</td></tr><tr><td role="rowheader" scope="row">19</td><td>4,891,011</td><td>76,609</td><td>596,115</td><td>5,563,735</td></tr><tr><td role="rowheader" scope="row">20</td><td>5,563,735</td><td>78,908</td><td>677,117</td><td>6,319,760</td></tr><tr><td role="rowheader" scope="row">21</td><td>6,319,760</td><td>81,275</td><td>768,124</td><td>7,169,160</td></tr><tr><td role="rowheader" scope="row">22</td><td>7,169,160</td><td>83,713</td><td>870,345</td><td>8,123,218</td></tr><tr><td role="rowheader" scope="row">23</td><td>8,123,218</td><td>86,225</td><td>985,133</td><td>9,194,575</td></tr><tr><td role="rowheader" scope="row">24</td><td>9,194,575</td><td>88,811</td><td>1,114,006</td><td>10,397,393</td></tr><tr><td role="rowheader" scope="row">25</td><td>10,397,393</td><td>91,476</td><td>1,258,664</td><td>11,747,533</td></tr><tr><td role="rowheader" scope="row">26</td><td>11,747,533</td><td>94,220</td><td>1,421,010</td><td>13,262,764</td></tr><tr><td role="rowheader" scope="row">27</td><td>13,262,764</td><td>97,047</td><td>1,603,177</td><td>14,962,988</td></tr></table><span style="padding-bottom:2px;background-color:#eee;line-height:1.45em;border-bottom:1px dotted;border-top:1px dotted;"><span style="color:#81A41E;font-size:100%;font-weight:700;"> FINANCIAL PLANNERS</span> <span style="color:#000;font-size:100%;font-weight:normal;">– <a href="http://www.plannerportal.com" target="_PP_WINDOW">Affordable Financial Planning Software</a> – <a href="http://www.plannerportal.com" target="_PP_WINDOW">www.PlannerPortal.com</a></span>  </span>