Investing / Evergreen
Compound growth. Without the hype.
See what the mathematics explains—and what it cannot promise.
Time magnifies the assumptions in a compound-growth model. It does not make those assumptions certain.
Growth can build on earlier growth
Compounding happens when a return stays invested and can itself earn a return. With a constant hypothetical annual return of 5%, 1,000 currency units become 1,050 after a year and 1,102.50 after two years. The second year's gain is larger because the base is larger.
A curve is not a forecast
A smooth calculator line reflects a constant-rate assumption. Investments can lose money, and actual returns arrive in a changing sequence. A 20% gain followed by a 20% loss leaves 1,000 at 960, not back at 1,000. The arithmetic average of those returns is zero, but the ending balance is lower.
Contributions and returns are different
A growing balance may reflect new contributions as well as investment results. A useful illustration separates the amount contributed from modeled growth. Our explorer does that, using end-of-month contributions and a nominal annual rate divided by 12. Currency selection changes the display; it does not convert money.
Read the missing pieces
Simple models often exclude taxes, fees, inflation, and withdrawals. Those omissions matter over long periods. Try several assumptions to understand sensitivity rather than treating one projection as a destination. No calculator can determine whether a particular investment or contribution level suits a person.
A global perspective
Compounding mathematics works in any currency. Actual products, fees, tax treatment, and investor protections depend on where and how the investment is held.
Sources & further reading
Investor.gov — Introduction to investing ↗Sources checked Oct 15, 2026. Examples are original illustrations. No affiliation with cited organizations.
Make the idea stick.
Mark complete when you are ready. Reaching the end alone does not mark a lesson complete.
What assumption in this guide would change the result in a different situation? Revisit the example and explain that change in your own words.
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