See how your money grows over time. Compound interest is the most powerful force in personal finance — Einstein allegedly called it the 8th wonder of the world.
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compound growth
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total at end
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Return on investment—
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Note: This calculator uses the compound interest formula with optional monthly contributions. Returns are not guaranteed — past market performance does not predict future results. Consult a financial advisor before making investment decisions.
Compound Interest — FAQ
What is compound interest?
Compound interest means you earn interest on your interest, not just on your original principal. For example, $10,000 at 7% annual interest earns $700 the first year. In year two, you earn 7% on $10,700 — not just $10,000. Over decades, this snowball effect creates enormous wealth.
What is a realistic annual return to expect?
The S&P 500 has historically returned about 10% per year before inflation, or about 7% after inflation. Savings accounts currently pay 4–5% APY. Bonds typically return 3–5%. The calculator defaults to 7% as a conservative long-term equity estimate.
How much does compounding frequency matter?
More frequent compounding means slightly more growth. Monthly compounding earns modestly more than annual. The difference between monthly and daily is minimal. What matters far more is starting early and contributing consistently.
What is the Rule of 72?
The Rule of 72 is a quick mental math shortcut: divide 72 by your annual interest rate to estimate how many years it takes to double your money. At 7%, your money doubles in about 72/7 = 10.3 years. At 10%, it doubles in about 7.2 years.