Compound Interest Calculator

Watch your money grow over time

"Compound interest is the eighth wonder of the world. He who understands it, earns it; he who doesn't, pays it."

— Albert Einstein

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Future Value $0
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Total Interest Earned $0
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Frequently Asked Questions

What is compound interest?

Compound interest is interest calculated on both the initial principal and the accumulated interest from previous periods. Unlike simple interest (calculated only on principal), compound interest grows exponentially because you earn "interest on interest."

This is why Einstein allegedly called it the "eighth wonder of the world" — small amounts grow into large sums given enough time.

How much will $10,000 grow in 10 years?

At a 7% annual return compounded monthly, $10,000 will grow to approximately $20,097 in 10 years — more than doubling your money.

Add $500 monthly contributions, and you'd have about $107,000. Try it yourself with the calculator above!

What is the Rule of 72?

The Rule of 72 is a quick way to estimate how long it takes to double your money. Simply divide 72 by your annual interest rate:

  • At 6% interest → doubles in ~12 years (72÷6)
  • At 8% interest → doubles in ~9 years (72÷8)
  • At 12% interest → doubles in ~6 years (72÷12)
How often should interest compound?

More frequent compounding means slightly more growth. Here's $10,000 at 7% for 10 years:

  • Annual compounding: $19,672
  • Monthly compounding: $20,097
  • Daily compounding: $20,138

The difference is often small. The real keys are your interest rate and time invested.

What's a realistic rate of return?

Historical averages:

  • S&P 500: ~10% annually (7% after inflation)
  • High-yield savings: 4-5% (2024-2025)
  • Bonds: 3-5% typically

For long-term stock market projections, 7% is a commonly used conservative estimate.

Why are monthly contributions so powerful?

Monthly contributions dramatically accelerate wealth building through "dollar-cost averaging."

Example at 7% for 20 years:

  • $10,000 initial only: $40,000
  • $10,000 + $500/month: $310,000+

That's $130,000 in interest alone! Consistent contributions often matter more than a large initial amount.