The loop extrusion model describes the organization of chromatin into dynamic loops by protein complexes such as cohesin. We developed a theoretical model that quantifies how key parameters, including cohesin residence time on chromatin, extrusion velocity, and the number density of chromatin-bound cohesins, regulate genomic contacts. The model describes chromatin contact probabilities and predicts that loop formation probability is a nonmonotonic function of loop length. The dynamics extension of our theory demonstrates that active loop extrusion causes the apparent fractal dimension of chromatin to cross over between 2 and 4 at approximately 100 kilo-base pairs. Furthermore, the model describes how extrusion stretches chromatin regions directly adjacent to loops and causes anomalous dynamics of chromatin-bound cohesins. This work provides a theoretical basis for the compact organization of interphase chromatin and explains suppression of chromatin entanglements.