Visualize the power of compounding returns
Compound interest earns returns not just on your initial investment, but on previously accumulated returns as well. The formula is: Final = Initial × (1 + rate)^periods.
The difference between compound and simple interest grows exponentially with time. Over 20 years at 10% annual return, $10,000 becomes $67,275 with compounding vs $30,000 with simple interest.
Adding regular contributions dramatically accelerates growth. Even small monthly additions compound into significant amounts over decades.
