Video narration
Could $1,000 really become nearly $30,000 just by waiting? Picture your savings balance starting at $1,000. Each year, it earns growth, and that growth stays in the balance. So next year, growth is calculated on the larger amount-not just your original thousand. That's compound interest: growth earning more growth. The snowball is only a picture of your balance. At year five, the balance is $1,762; at ten, $3,106. By year twenty, it reaches $9,646, then $29,960 by year thirty. The early increases look modest; later, there's more growth in the balance to build on. But here's the catch: the big result assumes the balance grows by 12% per year, every year, on its full current amount. That isn't guaranteed; real investment returns vary. So yes-at that assumed rate, your $1,000 balance reaches nearly $30,000 in 30 years.