Compound interest is interest earned on both your original money and the interest it has already earned, which is why growth accelerates over time.

The formula depends on three inputs: how much you contribute, the annual return, and how many years you stay invested.

At a 7% average annual return, $100 a month for 30 years grows to about $121,000, even though you only contributed $36,000.

Starting ten years earlier can matter more than doubling your monthly contribution later, because early money has more years to compound.