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 $23,000 per year with the annual contribution being increased by 6% per year (cumulative contributions of $909,069) you are able to accumulate $2,099,287 over 20 years. Compound interest makes up $1,190,218 of your future balance. <div id="chart1Container">Chart will load here</div> <script type="text/javascript"> <!-- var myChart1 = new FusionCharts( "Pie2D", "myChart1Id", "100%", "100%", "0", "1" ); myChart1.setXMLData("<chart showValues='1' showFCMenuItem='0' decimals='0' formatNumberScale='0' startingAngle='45' enableRotation='1' caption='Value Of Compound Interest' xAxisName='' numberPrefix='$' bgColor='FFFFFF' showBorder='1' borderColor='FFFFFF' borderThickness='1' canvasBgColor='ffffff' showAlternateHGridColor='0' plotGradientColor='' numberSuffix='' thousandSeparator=',' decimalSeparator='.'><set value='63000.0' label='Beginning Balance' /><set value='846069.0' label='Annual Contributions' /><set value='1190218.0' 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 @ 6.00%</th><th scope="col">Interest @ 8.00%</th><th scope="col">Ending Balance</th></tr><tr><td role="rowheader" scope="row">1</td><td>$63,000</td><td>$23,000</td><td>$6,880</td><td>$92,880</td></tr><tr><td role="rowheader" scope="row">2</td><td>92,880</td><td>24,380</td><td>9,381</td><td>126,641</td></tr><tr><td role="rowheader" scope="row">3</td><td>126,641</td><td>25,843</td><td>12,199</td><td>164,682</td></tr><tr><td role="rowheader" scope="row">4</td><td>164,682</td><td>27,393</td><td>15,366</td><td>207,442</td></tr><tr><td role="rowheader" scope="row">5</td><td>207,442</td><td>29,037</td><td>18,918</td><td>255,397</td></tr><tr><td role="rowheader" scope="row">6</td><td>255,397</td><td>30,779</td><td>22,894</td><td>309,070</td></tr><tr><td role="rowheader" scope="row">7</td><td>309,070</td><td>32,626</td><td>27,336</td><td>369,032</td></tr><tr><td role="rowheader" scope="row">8</td><td>369,032</td><td>34,583</td><td>32,289</td><td>435,905</td></tr><tr><td role="rowheader" scope="row">9</td><td>435,905</td><td>36,659</td><td>37,805</td><td>510,368</td></tr><tr><td role="rowheader" scope="row">10</td><td>510,368</td><td>38,858</td><td>43,938</td><td>593,164</td></tr><tr><td role="rowheader" scope="row">11</td><td>593,164</td><td>41,189</td><td>50,748</td><td>685,102</td></tr><tr><td role="rowheader" scope="row">12</td><td>685,102</td><td>43,661</td><td>58,301</td><td>787,064</td></tr><tr><td role="rowheader" scope="row">13</td><td>787,064</td><td>46,281</td><td>66,668</td><td>900,012</td></tr><tr><td role="rowheader" scope="row">14</td><td>900,012</td><td>49,057</td><td>75,926</td><td>1,024,995</td></tr><tr><td role="rowheader" scope="row">15</td><td>1,024,995</td><td>52,001</td><td>86,160</td><td>1,163,155</td></tr><tr><td role="rowheader" scope="row">16</td><td>1,163,155</td><td>55,121</td><td>97,462</td><td>1,315,738</td></tr><tr><td role="rowheader" scope="row">17</td><td>1,315,738</td><td>58,428</td><td>109,933</td><td>1,484,100</td></tr><tr><td role="rowheader" scope="row">18</td><td>1,484,100</td><td>61,934</td><td>123,683</td><td>1,669,716</td></tr><tr><td role="rowheader" scope="row">19</td><td>1,669,716</td><td>65,650</td><td>138,829</td><td>1,874,195</td></tr><tr><td role="rowheader" scope="row">20</td><td>1,874,195</td><td>69,589</td><td>155,503</td><td>2,099,287</td></tr></table>