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Compound Interest Calculator

See exactly how your money grows over time — with yearly breakdowns, visual charts, and the Rule of 72.

✓ Year-by-Year Breakdown ✓ Visual Bar Chart ✓ Monthly Contributions ✓ Rule of 72
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How Compound Interest Works — And Why It Changes Everything

Albert Einstein reportedly called compound interest the "eighth wonder of the world." Whether or not he actually said it, the math is undeniable. Compound interest is the reason a small, consistent investment in your 20s can grow into a life-changing sum by retirement — without any extra work from you.

Compound vs Simple Interest

Simple interest calculates returns only on your initial principal. Compound interest calculates returns on your principal plus all previously earned interest. Over 30 years, the difference is enormous. A $10,000 investment at 8% simple interest grows to $34,000. The same investment with annual compounding grows to over $100,000.

The biggest factor: time

Starting 10 years earlier can literally double your final investment value. The longer money compounds, the more dramatic the growth becomes in the later years. This is why financial advisors consistently emphasize starting early above almost everything else.

💡 Investing Tips

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Starting 10 years earlier can double your final return — time beats contribution size.

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Monthly contributions matter more than a single lump sum over long periods.

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Even 1% lower fees on index funds saves tens of thousands over 30 years.

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Rule of 72: divide 72 by your rate to find years to double your money.

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Frequently Asked Questions

Compound interest is interest calculated on both your initial principal and all previously accumulated interest. Unlike simple interest, your returns grow exponentially because each period's earnings become part of the base for the next calculation.

A = P(1 + r/n)^(nt), where A is the final amount, P is the principal invested, r is the annual interest rate as a decimal, n is the number of compounding periods per year, and t is the number of years. For monthly contributions, the future value of an annuity formula is added on top.

Yes, but the difference between daily and monthly compounding is very small for typical investment amounts. The difference between annual and monthly compounding is more significant. More frequent compounding always earns slightly more because interest begins earning interest sooner.

The Rule of 72 is a quick mental shortcut: divide 72 by your annual interest rate to estimate how many years it takes to double your money. At 6% interest, money doubles in roughly 12 years. At 9%, it doubles in 8 years. It's a surprisingly accurate approximation.

Inflation reduces purchasing power over time. A future value of $1,000,000 in 30 years has less real-world buying power than $1,000,000 today. The inflation-adjusted (real) return shows what your money is actually worth in today's dollars, giving you a more realistic picture of your wealth.