The Power of Compound Interest Over Time
Growth of 10,000 EUR at 7% Per Year
| Duration | Final amount | Interest earned |
|---|---|---|
| 10 years | 19,672 EUR | 9,672 EUR |
| 20 years | 38,697 EUR | 28,697 EUR |
| 30 years | 76,123 EUR | 66,123 EUR |
The capital multiplies by 7.6x over 30 years. The longer the duration, the more dramatic the acceleration becomes.
The Rule of 72
To estimate how long it takes to double your money, divide 72 by the annual return rate. At 7%, your capital doubles in roughly 10.3 years. At 4%, it takes 18 years. This shortcut helps quickly assess the growth potential of any investment.
Compounding Frequency Matters
The more frequently interest is compounded (monthly vs annually), the higher the effective return. For 10,000 EUR at 7% over 10 years: annual compounding yields 19,672 EUR, while monthly compounding yields 20,097 EUR -- an extra 425 EUR from more frequent reinvestment.