£25,000 Compounded: 10 years vs 20 years
Same starting amount, same rate — different horizon. Here's what extra time does to the final balance.
After 10 years vs 20 years at 5%
- 10 years: £40,722.37
- 20 years: £66,332.44
- Extra growth from the extra 10 years: £25,610.08
The headline insight: the extra 10 years isn't worth 10/10 more — it's worth 63% more. That's the non-linear compounding tail.
Full calculator pages
Why the tail is so big
Compound interest is front-loaded in absolute terms but back-loaded in growth. In the first 10 years, £25,000 grows to £40,722.37 — a gain of £15,722.37. In the additional 10 years that follow, it almost doubles again to £66,332.44, because each year's gain is percentage-of-a-larger-number. This is the reason that starting a pension at 25 rather than 35 is almost always worth more than working an extra year at the end of your career.
At different rates
- 3% (cash ISA long-term): £33,597.91 after 10y, £45,152.78 after 20y
- 5% (balanced portfolio): £40,722.37 after 10y, £66,332.44 after 20y
- 7% (equity tracker long-term average): £49,178.78 after 10y, £96,742.11 after 20y
Real vs nominal return
These figures are nominal — they ignore inflation. At 3% long-run CPI, the £66,332.44 after 20 years has purchasing power equivalent to roughly £36,726.67 in today's money. Compounding still wins, but the real-return figure is what matters for long-term planning.