Compound Interest Calculator

See exactly how your money grows over time. Visualize the power of compounding with an interactive chart.

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Total Value
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Interest Earned
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Growth Over Time
Principal + Contributions Interest Earned
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What Is Compound Interest?

Compound interest is interest calculated on both the initial principal and the accumulated interest from previous periods. This creates a snowball effect where your money grows faster over time. Albert Einstein reportedly called it "the eighth wonder of the world."

The formula is: A = P(1 + r/n)nt where P = principal, r = annual rate, n = compounding frequency per year, and t = time in years.

The Power of Starting Early

Consider two investors: one starts at age 25 investing $200/month, the other starts at 35 with the same amount. At 7% annual return by age 65, the early starter has approximately $525,000 while the late starter has approximately $244,000. Those extra 10 years of compounding nearly doubled the result — with only $24,000 more in contributions.

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Frequently Asked Questions

What is compound interest?
Compound interest is interest earned on both your original money and on interest already accumulated. Unlike simple interest (which only earns on the original amount), compound interest grows exponentially, making it a powerful tool for long-term wealth building.
How often should interest be compounded?
More frequent compounding produces slightly higher returns. Monthly compounding is the most common for savings accounts and investments. The difference between monthly and daily compounding is minimal — about 0.01% per year on typical rates. Annual vs monthly makes a more noticeable difference.
How much will $10,000 grow in 20 years?
At 7% annual return compounded monthly, $10,000 alone grows to approximately $40,387 in 20 years. If you add $200 per month in contributions, it reaches approximately $144,573 — with $58,000 contributed and $86,573 in interest earned.
What is a realistic rate of return?
The S&P 500 has historically returned about 10% annually before inflation and 7% after inflation. High-yield savings accounts offer 4–5% in 2026. Bonds average 4–6%. For long-term projections, 7% is a commonly used conservative estimate for stock market investments.