See how compound interest grows your investments over time. Enter your initial investment, monthly contributions, and expected return for year-by-year projections.
Albert Einstein reportedly called compound interest the "eighth wonder of the world." A $10,000 investment with $200/month at 7% annual return grows to over $138,000 in 20 years — even though total contributions are only $58,000. The remaining $80,000+ is pure compound interest. Starting early makes an enormous difference: money invested in your 20s has decades to compound, while money invested in your 40s has half the time. All calculations run in your browser — your data never leaves your device.
Compound interest is interest calculated on both the initial principal and the accumulated interest from previous periods. Unlike simple interest (which only earns on the principal), compound interest grows exponentially — your interest earns interest. This "compounding effect" is why long-term investments grow so dramatically over time.
Compound interest can compound daily, monthly, quarterly, or annually. The more frequently it compounds, the more interest you earn. Daily compounding earns slightly more than monthly or annually at the same stated rate. Our compound interest calculator lets you compare all compounding frequencies.
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. For example, at 7% annual return, your money doubles in roughly 72 ÷ 7 ≈ 10.3 years. It works best for rates between 6% and 10%.
Simple interest is calculated only on the original principal: Interest = Principal × Rate × Time. Compound interest also earns interest on previously accumulated interest. Over long periods, the difference is enormous. $10,000 at 7% simple interest for 30 years = $31,000. At 7% compound interest = $76,122.
Historically, the U.S. stock market (S&P 500) has returned about 10% annually before inflation, or about 7% after inflation. High-yield savings accounts offer 4–5%. CDs offer 4–5%. Bonds average 2–4%. The "right" return depends on your risk tolerance and investment horizon. This calculator defaults to 7% as a conservative long-term estimate.