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 $1,200 per year with the annual contribution being increased by 10% per year (cumulative contributions of $29,927) you are able to accumulate $45,821 over 13 years. Compound interest makes up $15,894 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 @ 10.00%</th><th scope="col">Interest @ 7.00%</th><th scope="col">Ending Balance</th></tr><tr><td role="rowheader" scope="row">1</td><td>$500</td><td>$1,200</td><td>$119</td><td>$1,819</td></tr><tr><td role="rowheader" scope="row">2</td><td>1,819</td><td>1,320</td><td>220</td><td>3,359</td></tr><tr><td role="rowheader" scope="row">3</td><td>3,359</td><td>1,452</td><td>337</td><td>5,147</td></tr><tr><td role="rowheader" scope="row">4</td><td>5,147</td><td>1,597</td><td>472</td><td>7,217</td></tr><tr><td role="rowheader" scope="row">5</td><td>7,217</td><td>1,757</td><td>628</td><td>9,602</td></tr><tr><td role="rowheader" scope="row">6</td><td>9,602</td><td>1,933</td><td>807</td><td>12,342</td></tr><tr><td role="rowheader" scope="row">7</td><td>12,342</td><td>2,126</td><td>1,013</td><td>15,481</td></tr><tr><td role="rowheader" scope="row">8</td><td>15,481</td><td>2,338</td><td>1,247</td><td>19,066</td></tr><tr><td role="rowheader" scope="row">9</td><td>19,066</td><td>2,572</td><td>1,515</td><td>23,153</td></tr><tr><td role="rowheader" scope="row">10</td><td>23,153</td><td>2,830</td><td>1,819</td><td>27,802</td></tr><tr><td role="rowheader" scope="row">11</td><td>27,802</td><td>3,112</td><td>2,164</td><td>33,078</td></tr><tr><td role="rowheader" scope="row">12</td><td>33,078</td><td>3,424</td><td>2,555</td><td>39,057</td></tr><tr><td role="rowheader" scope="row">13</td><td>39,057</td><td>3,766</td><td>2,998</td><td>45,821</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>