Watch your investments grow over time.
Watch your investments grow over time.
Enter your starting balance (principal), annual interest rate, compounding frequency, and investment time horizon. Add a monthly contribution if you plan to invest regularly. The calculator shows your ending balance, total contributions made, and total interest/growth earned โ broken down so you can see exactly how much of your final balance came from your own money versus compound growth.
Use this calculator for savings accounts, CDs, investment portfolios, retirement accounts, or any scenario where money grows over time. It also works in reverse โ enter a debt balance to see how unpaid interest compounds against you.
Compound interest means you earn interest on your interest. In the first year, you earn interest on your principal. In year two, you earn interest on the principal plus last year's interest. This self-reinforcing growth is what Einstein (apocryphally) called the eighth wonder of the world.
A concrete example: $10,000 invested at 8% annual return. After 10 years: $21,589. After 20 years: $46,610. After 30 years: $100,627. Your money 10x'd in 30 years without any additional contributions โ purely from compounding. Add $300/month and that same scenario produces $447,000 after 30 years.
Interest can compound annually, quarterly, monthly, or daily. More frequent compounding = slightly higher effective yield. A 6% rate compounded monthly is actually a 6.17% effective annual rate. The difference seems small but adds up meaningfully over decades. Most high-yield savings accounts compound daily, giving you the maximum benefit.
A quick mental shortcut: divide 72 by your annual interest rate to get the number of years it takes to double your money. At 6%, money doubles every 12 years (72 รท 6). At 9%, every 8 years. At 12%, every 6 years. This is why higher returns โ even a few percentage points higher โ have such dramatic effects over long time horizons.
The same math that grows wealth can destroy it. Credit card debt at 22% APR compounds monthly. A $5,000 balance with minimum payments can take 15+ years and cost $8,000โ$12,000 in interest before it's paid off. The compound interest calculator shows both sides of this โ use it to motivate aggressive debt payoff just as much as patient investing.
Compound interest earns interest on previously earned interest, which is why growth curves upward rather than running in a straight line.
The mechanism is visible in the first few years and dramatic over decades. $10,000 at 7% earns $700 in year one. In year two it earns $749, because the $700 is now earning too. By year twenty the annual gain is over $2,500 — on the same original deposit.
The formula is:
A = P(1 + r/n)nt
where P is the principal, r the annual rate, n the compounding periods per year, and t the years.
A useful mental shortcut: divide 72 by the annual return to estimate how many years money takes to double.
At 6% that is 12 years. At 9%, 8 years. At 3%, 24 years. The approximation is close enough for rates between roughly 4% and 12%, which covers most realistic cases.
It works in reverse too. At 3% inflation, prices double — and idle cash halves in value — every 24 years. That framing makes the cost of holding long-term savings in a low-interest account considerably more vivid than a percentage does.
Compound interest calculations assume a constant rate, which no real investment provides. Markets deliver their average through a sequence of good and bad years, and the order matters if you are adding or withdrawing along the way.
Two adjustments make projections more honest. Subtract inflation to get a real return — 7% nominal during 3% inflation is 4% in purchasing power. And subtract fees: a 1% annual expense ratio compounds against you exactly as returns compound for you, and over thirty years consumes a substantial share of the final balance.
The conclusion that survives all of this is simple and worth acting on: time in the market matters more than the exact rate, and starting earlier beats optimising later.
The S&P 500 has returned roughly 10% annually before inflation over the past century, or about 7% after inflation. Financial planners commonly use 6โ7% as a conservative long-term projection for a diversified stock/bond portfolio.
Inflation erodes purchasing power. If your investment earns 8% but inflation is 3%, your real return is about 5%. The calculator shows nominal growth โ to find your real return, subtract your expected inflation rate from the interest rate input.
Tax-advantaged accounts like 401(k)s and IRAs compound without annual tax drag โ making them far more powerful than taxable accounts for long-term growth. Maximize these before putting money in a standard brokerage account.