Compound Interest Calculator

Visualize how your money grows over time with the power of compounding

Future Value
$691,150
After 30 years at 7% annual return
Initial Investment $10,000
Monthly Contributions $500 x 360
Total Contributions $190,000
Interest Earned $501,150
Total Future Value $691,150

Value Breakdown

Growth Over Time

Understanding Compound Interest

Compound interest is often called the 'eighth wonder of the world' because it allows your money to grow exponentially over time.

The Power of Compounding

Unlike simple interest, compound interest earns returns on both your principal and previously earned interest.

  • Early contributions have the longest time to grow and generate the most returns.
  • The Rule of 72: Divide 72 by your interest rate to estimate years to double.
  • More frequent compounding (monthly vs annually) slightly increases your returns.
  • Even small, consistent contributions can grow to substantial amounts over decades.

Historical Market Returns

Understanding historical returns helps set realistic expectations for your investment growth.

  • S&P 500 average: ~10% annually before inflation (~7% after inflation).
  • Bond funds average: ~5-6% annually with lower volatility.
  • High-yield savings: ~4-5% currently (varies with Fed rates).
  • Past performance doesn't guarantee future results.

Maximizing Growth

Simple strategies can dramatically increase your final investment value over time.

  • Start early: Time in the market beats timing the market.
  • Increase contributions with raises to accelerate growth.
  • Reinvest dividends to compound your returns faster.
  • Keep fees low: A 1% fee can cost 25%+ of your wealth over 30 years.