Growth of an initial principal with regular contributions under compound interest.
From the same money paid in, the plan that starts early grows far larger: compounding needs time.
Shared interest rate: 6.00% (from the slider above).
The same yearly returns in a different order: without withdrawals the ending wealth doesn't change, but with regular withdrawals an early crash costs far more.
An illustrative, made-up sequence with one −30% year. Drag the bars sideways, or focus one and use ← / →.
The time value of money says a unit of money today is worth more than the same amount later, because it can earn interest. This compound interest calculator grows a starting principal and regular contributions over time and splits the final balance into the money you paid in and the interest it earned.
Interest is earned on previously earned interest as well as on the principal, so the balance grows exponentially rather than linearly.
Future value compounds an amount forward at the interest rate; present value discounts a future amount back to today. They are the same calculation in opposite directions.