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 $455 per year with the annual contribution being increased by 10% per year (cumulative contributions of $26,515) you are able to accumulate $52,896 over 20 years. Compound interest makes up $26,381 of your future balance. <div id="chart1Container">Chart will load here</div> <script type="text/javascript"> <!-- var myChart1 = new FusionCharts( "Pie2D", "myChart1Id", "100%", "100%", "0", "1" ); myChart1.setXMLData("<chart showValues='1' showFCMenuItem='0' decimals='0' formatNumberScale='0' startingAngle='45' enableRotation='1' caption='Value Of Compound Interest' xAxisName='' numberPrefix='$' bgColor='FFFFFF' showBorder='1' borderColor='FFFFFF' borderThickness='1' canvasBgColor='ffffff' showAlternateHGridColor='0' plotGradientColor='' numberSuffix='' thousandSeparator=',' decimalSeparator='.'><set value='455.0' label='Beginning Balance' /><set value='26060.0' label='Annual Contributions' /><set value='26381.0' 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 @ 10.00%</th><th scope="col">Interest @ 8.00%</th><th scope="col">Ending Balance</th></tr><tr><td role="rowheader" scope="row">1</td><td>$455</td><td>$455</td><td>$73</td><td>$983</td></tr><tr><td role="rowheader" scope="row">2</td><td>983</td><td>501</td><td>119</td><td>1,602</td></tr><tr><td role="rowheader" scope="row">3</td><td>1,602</td><td>551</td><td>172</td><td>2,325</td></tr><tr><td role="rowheader" scope="row">4</td><td>2,325</td><td>606</td><td>234</td><td>3,165</td></tr><tr><td role="rowheader" scope="row">5</td><td>3,165</td><td>666</td><td>306</td><td>4,137</td></tr><tr><td role="rowheader" scope="row">6</td><td>4,137</td><td>733</td><td>390</td><td>5,260</td></tr><tr><td role="rowheader" scope="row">7</td><td>5,260</td><td>806</td><td>485</td><td>6,551</td></tr><tr><td role="rowheader" scope="row">8</td><td>6,551</td><td>887</td><td>595</td><td>8,033</td></tr><tr><td role="rowheader" scope="row">9</td><td>8,033</td><td>975</td><td>721</td><td>9,729</td></tr><tr><td role="rowheader" scope="row">10</td><td>9,729</td><td>1,073</td><td>864</td><td>11,666</td></tr><tr><td role="rowheader" scope="row">11</td><td>11,666</td><td>1,180</td><td>1,028</td><td>13,874</td></tr><tr><td role="rowheader" scope="row">12</td><td>13,874</td><td>1,298</td><td>1,214</td><td>16,386</td></tr><tr><td role="rowheader" scope="row">13</td><td>16,386</td><td>1,428</td><td>1,425</td><td>19,239</td></tr><tr><td role="rowheader" scope="row">14</td><td>19,239</td><td>1,571</td><td>1,665</td><td>22,474</td></tr><tr><td role="rowheader" scope="row">15</td><td>22,474</td><td>1,728</td><td>1,936</td><td>26,138</td></tr><tr><td role="rowheader" scope="row">16</td><td>26,138</td><td>1,901</td><td>2,243</td><td>30,282</td></tr><tr><td role="rowheader" scope="row">17</td><td>30,282</td><td>2,091</td><td>2,590</td><td>34,962</td></tr><tr><td role="rowheader" scope="row">18</td><td>34,962</td><td>2,300</td><td>2,981</td><td>40,243</td></tr><tr><td role="rowheader" scope="row">19</td><td>40,243</td><td>2,530</td><td>3,422</td><td>46,195</td></tr><tr><td role="rowheader" scope="row">20</td><td>46,195</td><td>2,783</td><td>3,918</td><td>52,896</td></tr></table>