$20,000 invested at 7% annual return compounded monthly grows to $80,775 in 20 years — $60,775 of that is compound interest. Adding $200 monthly contributions would grow the total to $184,960.
Key Numbers
- •Starting amount: $20,000
- •Value after 20 years at 7%: $80,775
- •Interest earned: $60,775
- •With $200/month added: $184,960
- •At 7%, money doubles roughly every 10.3 years (rule of 72)