When returns are reinvested, each year's growth applies to a larger base. $10,000 growing at 7% a year becomes about $19,700 after 10 years, $38,700 after 20 and $76,100 after 30.
The rule of 72 gives a rough doubling time: 72 divided by the annual return in per cent.
Why it matters
Compounding works on costs too: a 1% annual fee takes about a quarter of the final balance over 30 years. Small differences in returns, fees and inflation become large over long periods.
General information, not advice.