Compound Interest Calculator
See how your savings grow over time with compound interest and regular contributions.
Your investment
See the eighth wonder of the world at work
Compound interest rewards time and consistency more than amount. Watch how steady contributions and patience turn into real wealth.
Visual growth chart
A year-by-year bar chart splits your balance into contributions versus interest, so you can literally watch the moment compounding overtakes your own deposits.
Regular contributions
Model recurring monthly contributions on top of a starting amount — the realistic way most people actually invest through paychecks and automatic transfers.
Flexible compounding
Choose monthly, quarterly, or annual compounding to match a savings account, CD, bond, or investment fund.
Principal vs interest
See exactly how much of the final balance is money you contributed versus growth earned — the ratio that flips dramatically over long horizons.
Instant what-ifs
Change the rate, contribution, or time horizon and the projection updates live, making it easy to find a plan that hits your goal.
100% private
All math runs in your browser — your financial figures never leave your device.
What people model with it
Retirement saving
Project a brokerage or IRA balance decades out and see if your contribution rate gets you there.
College fund
Model a 529 or savings plan growing from a child's birth to college age.
Savings goals
See how a high-yield savings account or CD grows toward a house deposit or big purchase.
The cost of waiting
Compare starting now versus in five years to see how much the delay costs in final balance.
Frequently Asked Questions
What is compound interest?
Compound interest is interest earned on both your original money and on the interest it has already earned. Unlike simple interest, which only ever pays on the principal, compounding reinvests each period's gains so your balance grows at an accelerating rate. Over long periods this snowball effect is what turns modest, steady saving into substantial wealth.
How does compounding frequency affect the result?
The more often interest compounds, the slightly higher the final balance, because gains start earning their own gains sooner. Monthly compounding beats annual compounding for the same nominal rate, though the difference is modest. This calculator lets you choose monthly, quarterly, or annual compounding to match the account you are modeling.
What return rate should I use?
It depends on the investment. A high-yield savings account or CD might be 4–5%; a diversified stock-market portfolio has historically averaged roughly 10% nominal (about 7% after inflation) over long periods, though with significant year-to-year volatility. Using 6–7% is a common conservative assumption for long-term investing. Lower, safer assumptions give more reliable planning figures.
Why do contributions matter so much?
Regular contributions are often the biggest driver of the final balance, especially early on before compounding takes over. Adding $500 a month to a $10,000 starting balance contributes $120,000 of your own money over 20 years — and the growth on those steady deposits compounds alongside the principal. Automating contributions is the single most reliable way to build wealth.
Does this account for inflation or taxes?
No — the projection shows nominal growth before inflation and taxes. Inflation reduces the purchasing power of the final figure (at 3% inflation, money roughly halves in real value over 24 years), and investment gains may be taxed depending on the account type. Tax-advantaged accounts like a 401(k) or Roth IRA shelter growth from tax, which is why they are so powerful for long-term investing.
What is the rule of 72?
The rule of 72 is a quick mental shortcut: divide 72 by your annual return rate to estimate how many years it takes money to double. At 8% it doubles roughly every 9 years; at 6%, every 12 years. It is a handy way to sanity-check long-term projections and to grasp how powerful a higher return becomes over multiple doubling cycles.
Understanding Compound Interest
Albert Einstein supposedly called compound interest the eighth wonder of the world. Whether or not he actually said it, the math is genuinely remarkable: money that earns interest on its interest grows not in a straight line but on an accelerating curve. Understanding this curve is the foundation of every long-term financial plan, from retirement saving to a child's college fund.
Simple vs compound interest
Simple interest pays only on your original principal — $1,000 at 5% earns $50 every year, forever. Compound interest pays on principal plus all accumulated interest, so year two earns 5% on $1,050, year three on $1,102.50, and so on. Over a year or two the difference is trivial. Over decades it is enormous: $10,000 at 7% compound becomes about $76,000 in 30 years, versus just $31,000 with simple interest.
Why time is the most powerful input
Because compounding accelerates, the years at the end matter far more than the years at the start — and that is exactly why starting early is so valuable. A 25-year-old who invests for ten years and then stops can finish with more than a 35-year-old who invests steadily for thirty years, simply because the early money has more doubling cycles ahead of it. The lesson every financial planner repeats: the best time to start was years ago; the second best time is now.
The role of contributions
For most people, regular contributions drive the early growth and compounding takes over later. In the first decade your own deposits usually dwarf the interest; somewhere in the second or third decade the lines cross and interest becomes the larger force. This is why automating contributions — paying your future self first, every month, regardless of market noise — is the single most reliable wealth-building habit. The amount matters less than the consistency and the time horizon.
The rule of 72
A handy shortcut: divide 72 by your annual return to estimate the doubling time. At 8%, money doubles about every 9 years; at 6%, every 12; at 10%, every 7.2. Over a 36-year career, an 8% portfolio goes through four doublings — turning $10,000 into roughly $160,000 from growth alone. Small differences in rate, compounded over many doublings, produce dramatically different outcomes, which is why fees and rate matter so much over a lifetime.
Inflation, taxes, and realistic expectations
The projected balance is in nominal dollars. Inflation erodes purchasing power — at 3% a year, money loses roughly half its real value over 24 years — so a million-dollar balance decades out buys less than a million today. Taxes also apply to gains in ordinary accounts, which is why tax-advantaged accounts like a 401(k) or Roth IRA are so valuable: they let compounding work without the annual tax drag. Use a conservative return assumption, keep contributing, and let time do the heavy lifting.