£5,000 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: £8,144.47
- 20 years: £13,266.49
- Extra growth from the extra 10 years: £5,122.02
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, £5,000 grows to £8,144.47 — a gain of £3,144.47. In the additional 10 years that follow, it almost doubles again to £13,266.49, 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): £6,719.58 after 10y, £9,030.56 after 20y
- 5% (balanced portfolio): £8,144.47 after 10y, £13,266.49 after 20y
- 7% (equity tracker long-term average): £9,835.76 after 10y, £19,348.42 after 20y
Real vs nominal return
These figures are nominal — they ignore inflation. At 3% long-run CPI, the £13,266.49 after 20 years has purchasing power equivalent to roughly £7,345.33 in today's money. Compounding still wins, but the real-return figure is what matters for long-term planning.