Time + interest = wealth
See how your money grows.
Enter your principal, rate, and monthly contributions. Watch a 30-year growth curve show contributions versus interest earned, and learn what the numbers actually mean.
No signups. No email capture. Just the math.
Compound Interest Calculator
See how your investments grow over time with compound interest, regular monthly contributions, and an optional yearly lump sum like a tax refund or bonus. Adjust the inputs below and watch the growth chart update instantly.
Optional lump sum added once a year — e.g. a tax refund or bonus.
Final Balance
$300,851
Total Contributed
$130,000
Interest Earned
$170,851
56.8% of final balance
Growth Over Time
Year-by-Year Breakdown
| Year | Contributions | Interest Earned | Balance |
|---|---|---|---|
| 1 | $16,000 | $919 | $16,919 |
| 2 | $22,000 | $2,339 | $24,339 |
| 3 | $28,000 | $4,294 | $32,294 |
| 4 | $34,000 | $6,825 | $40,825 |
| 5 | $40,000 | $9,973 | $49,973 |
| 6 | $46,000 | $13,782 | $59,782 |
| 7 | $52,000 | $18,299 | $70,299 |
| 8 | $58,000 | $23,578 | $81,578 |
| 9 | $64,000 | $29,671 | $93,671 |
| 10 | $70,000 | $36,639 | $106,639 |
| 11 | $76,000 | $44,544 | $120,544 |
| 12 | $82,000 | $53,455 | $135,455 |
| 13 | $88,000 | $63,443 | $151,443 |
| 14 | $94,000 | $74,587 | $168,587 |
| 15 | $100,000 | $86,971 | $186,971 |
| 16 | $106,000 | $100,683 | $206,683 |
| 17 | $112,000 | $115,820 | $227,820 |
| 18 | $118,000 | $132,486 | $250,486 |
| 19 | $124,000 | $150,790 | $274,790 |
| 20 | $130,000 | $170,851 | $300,851 |
What If I Started Earlier?
See how much more you could have with the same inputs but more time in the market.
Starting Now (20 years)
$300,851
Started 5 Years Ago (25 years)
$462,290
+$161,439 more
Started 10 Years Ago (30 years)
$691,150
+$390,300 more
The eighth wonder
The Power of Compound Interest
Compound interest is often called the “eighth wonder of the world” — a quote widely attributed to Albert Einstein, who reportedly added: “He who understands it, earns it; he who doesn't, pays it.” Unlike simple interest, which only earns returns on your original principal, compound interest earns returns on your returns. Over time, this creates an exponential growth curve.
Invest $10,000 at a 7% annual return and add $500/month, and after 30 years you would have over $680,000 — even though you only contributed $190,000 out of pocket. The remaining $490,000+ came entirely from compound interest working on your behalf.
This is why starting early matters. An investor who begins at 25 and contributes $500/month until 65 ends up far ahead of someone who starts at 35 with the same contributions. Time is the single most powerful ingredient in the compound interest formula.
Mental math
The Rule of 72
The Rule of 72 is a simple mental math shortcut for estimating how long it takes your money to double. Just divide 72 by your expected annual rate of return. The result is the approximate number of years to double your investment.
- At 6% return: 72 / 6 = 12 years to double
- At 8% return: 72 / 8 = 9 years to double
- At 10% return: 72 / 10 = 7.2 years to double
- At 12% return: 72 / 12 = 6 years to double
The Rule of 72 also works in reverse — you can use it to understand the erosion of purchasing power due to inflation. At 3% inflation, the purchasing power of your cash is cut in half in about 24 years (72 / 3 = 24). This is why keeping large amounts of money in a savings account earning below the inflation rate actually loses you wealth over time.
The formula
Compound Interest Formula
The formula used by this calculator to compute compound interest with regular contributions is:
Where each variable represents:
- A = final amount (future value)
- P = principal (initial investment)
- r = annual interest rate (as a decimal)
- n = number of compounding periods per year
- t = number of years
- PMT = regular contribution per compounding period
This calculator uses monthly compounding (n = 12), which is the most common frequency for investment accounts. The first part of the formula calculates the growth of your initial principal, while the second part calculates the accumulated value of your regular monthly contributions.
FAQ
Frequently Asked Questions
What is compound interest?
Compound interest is interest earned on both your initial investment and previously earned interest. Unlike simple interest (calculated only on the principal), compound interest accelerates growth over time — often called the 'eighth wonder of the world.'
What is the Rule of 72?
The Rule of 72 is a quick way to estimate how long it takes to double your money. Divide 72 by the annual return rate. At 7% returns, your money doubles in about 10.3 years. At 10%, it doubles in 7.2 years.
How much will $10,000 grow in 20 years?
At a 7% average annual return with no additional contributions, $10,000 grows to about $38,697. Adding $500/month in contributions brings the total to over $300,000 — that is the power of consistent investing.
What is a realistic rate of return?
The S&P 500 has historically returned about 10% per year before inflation (7% after inflation). A diversified portfolio might return 6-8% after inflation depending on your asset allocation.
How does compound interest differ from simple interest?
Simple interest is calculated only on the original principal. Compound interest is calculated on the principal plus all accumulated interest. Over long periods, compound interest dramatically outperforms simple interest.
Does compounding frequency matter?
Yes, more frequent compounding produces slightly higher returns. Daily compounding yields more than monthly, which yields more than annual. However, the difference is relatively small — the bigger factors are rate of return and time.
Articles
Learn About Compound Interest
Compound vs Simple Interest
Side-by-side comparison with worked examples over 5-40 years.
Rule of 72 Explained
Where the number 72 comes from, when it's accurate, and how to use it.
Compounding Frequency
Daily vs monthly vs annual — and the APY/APR distinction.
How Long Until Savings Double
Doubling times by rate, plus realistic returns for common accounts.
Compound Interest Formula
Step-by-step walkthrough with hand-verifiable examples.
Investing at 25 vs. 35
The $700,000 cost of waiting 10 years to start, with a side-by-side comparison.
Realistic returns
What rate should you actually use?
The S&P 500 has historically returned about 10% per year before inflation (around 7% after). A diversified portfolio might return 6-8% after inflation. Cash savings accounts often lose ground to inflation.
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