The last decade earns more.

The interest rate never changes, but because each year's interest is calculated on a bigger pile than the year before, the dollars added in the final decade can outweigh every earlier decade combined — even all of them put together.

A = P ( 1 + r n )^nt

Principal P P ∝ A

$1,000the amount you start with$50,000

Annual rate r A grows ∝ e^(r·t)

1%the rate that never changes12%

Years t t years invested

5 yrtime for compounding to work50 yr

Compounding n how often interest is added

Total after 40 years

Try

Compound interest: A = P(1 + r/n)^nt, where P is the starting principal, r the nominal annual rate, n the number of times per year interest compounds, and t the number of years. These are nominal figures with no adjustment for inflation, and the curve compares a single lump sum left untouched, not regular contributions. The stock-market average preset uses 7% as a commonly cited long-run average annual return for the S&P 500 after inflation — a historical figure, not a guarantee of future results. The dashed line shows what the same principal and rate would grow to under simple, non-compounding interest (P + P·r·t) — the gap between it and the solid curve is compounding. See compound interest on Wikipedia.