Part of the Finance collection — 4 tools available
Compound Interest Calculator — Calculate Your Investment Growth
Calculate compound interest growth over time. See how your investment grows with different rates, compounding frequencies, and regular contributions.
About This Calculator
Compound interest is the most powerful force in personal finance — Einstein allegedly called it the eighth wonder of the world. When your interest earns interest, even modest amounts grow exponentially over time. A $10,000 investment at 7% annual return grows to $19,672 in 10 years, $38,697 in 20 years, and $76,123 in 30 years without adding a single dollar. Understanding this growth helps you make smarter decisions about saving, investing, and the true cost of carrying debt. Our compound interest calculator shows the year-by-year growth and total return on any investment.
The Formula Behind This Calculator
A = P * (1 + r/n)^(n*t) More frequent compounding = higher returns Rule of 72: 72 / rate = Years to double.
Understanding the math helps you verify results and make better decisions for your project.
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How to Use
- 1Enter your initial investment amount.
- 2Enter any monthly contribution you plan to make.
- 3Set the expected annual return rate (7% is a common stock market average).
- 4Choose your investment time horizon in years.
- 5Set compounding frequency (monthly is standard).
- 6Click Calculate.
When to Use
- →Projecting how your retirement savings will grow over 20-30 years with regular contributions
- →Comparing the long-term impact of starting to invest now vs waiting 5 years
- →Seeing how increasing your monthly contribution by $100 affects your final balance over decades
Tips
- ✓Start investing as early as possible — a 25-year-old investing $200/month will have significantly more than a 35-year-old investing $400/month by age 65
- ✓Use 7% as a realistic long-term stock market return after inflation — don't plan on 10-12% sustained returns
- ✓Automate monthly contributions so you invest consistently regardless of market ups and downs
FAQ
What is compound interest?
Interest earned on both your original investment and previously earned interest. Over time, the compounding effect accelerates growth dramatically.
What annual return should I expect?
Historical stock market average: ~10% nominal, ~7% after inflation. Bonds: 3-5%. Savings accounts: 0.5-5% depending on rates.
How much should I invest monthly?
Start with whatever you can. Even $100/month invested at 7% grows to over $120,000 in 30 years. Automate contributions so you never forget.
Does compounding frequency matter?
More frequent compounding = slightly higher returns. Daily vs monthly makes a small difference, but over decades it adds up to meaningful money.
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