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 $12,500 per year with the annual contribution being increased by 4% per year (cumulative contributions of $468,798) you are able to accumulate $640,556 over 10 years. Compound interest makes up $171,758 of your future balance. <div id="chart1Container">Chart will load here</div> <script type="text/javascript"> <!-- var myChart1 = new FusionCharts( "Pie2D", "myChart1Id", "100%", "100%", "0", "1" ); myChart1.setXMLData("<chart showValues='1' showFCMenuItem='0' decimals='0' formatNumberScale='0' startingAngle='45' enableRotation='1' caption='Value Of Compound Interest' xAxisName='' numberPrefix='$' bgColor='FFFFFF' showBorder='1' borderColor='FFFFFF' borderThickness='1' canvasBgColor='ffffff' showAlternateHGridColor='0' plotGradientColor='' numberSuffix='' thousandSeparator=',' decimalSeparator='.'><set value='319000.0' label='Beginning Balance' /><set value='149798.0' label='Annual Contributions' /><set value='171758.0' label='Compound Interest' /></chart>"); // --> </script> <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 @ 3.96%</th><th scope="col">Interest @ 3.70%</th><th scope="col">Ending Balance</th></tr><tr><td role="rowheader" scope="row">1</td><td>$319,000</td><td>$12,500</td><td>$12,266</td><td>$343,766</td></tr><tr><td role="rowheader" scope="row">2</td><td>343,766</td><td>12,995</td><td>13,200</td><td>369,961</td></tr><tr><td role="rowheader" scope="row">3</td><td>369,961</td><td>13,510</td><td>14,188</td><td>397,659</td></tr><tr><td role="rowheader" scope="row">4</td><td>397,659</td><td>14,045</td><td>15,233</td><td>426,936</td></tr><tr><td role="rowheader" scope="row">5</td><td>426,936</td><td>14,601</td><td>16,337</td><td>457,874</td></tr><tr><td role="rowheader" scope="row">6</td><td>457,874</td><td>15,179</td><td>17,503</td><td>490,556</td></tr><tr><td role="rowheader" scope="row">7</td><td>490,556</td><td>15,780</td><td>18,734</td><td>525,070</td></tr><tr><td role="rowheader" scope="row">8</td><td>525,070</td><td>16,405</td><td>20,035</td><td>561,510</td></tr><tr><td role="rowheader" scope="row">9</td><td>561,510</td><td>17,055</td><td>21,407</td><td>599,971</td></tr><tr><td role="rowheader" scope="row">10</td><td>599,971</td><td>17,730</td><td>22,855</td><td>640,556</td></tr></table>