Compound Interest
See exactly how your money grows over time — and why starting early matters more than amount.
How to use this calculator
- Enter your starting balanceWhat you've already saved or invested today.
- Add your monthly contribution and expected returnUse a long-run figure — about 7% is common for a diversified stock portfolio.
- Set the time horizonThe longer the timeline, the more of the result comes from compounding rather than your deposits.
Compound interest is the engine behind almost every dollar you will ever build. It is interest earning interest: your money generates a return, those returns are added to your balance, and the next period you earn on the larger number. Run long enough, the curve stops looking like a line and starts looking like a hockey stick.
How it works
Simple interest pays a flat amount on your original deposit. Compounding folds each period's gains back into the balance, so the base you earn on keeps growing. Three levers drive the result: how much you contribute, your rate of return, and — by far the most powerful — time.
A worked example
Put $200 a month into an account returning 7% a year. After 10 years you have contributed $24,000 and hold roughly $34,000. Leave it for 30 years and your $72,000 of contributions becomes about $245,000. You did not get there by saving dramatically more — you got there by giving compounding decades to work.
The Rule of 72
Want a fast estimate of how long money takes to double? Divide 72 by your annual return. At 7%, money doubles about every 10 years; at 10%, about every 7. It is back-of-the-envelope math, but it makes the cost of waiting obvious.
Why starting early wins
Because time acts like an exponent, an investor who funds an account from 25 to 35 and then stops often finishes ahead of someone who starts at 35 and contributes for thirty straight years. The first decade does outsized work. Change the time horizon in the calculator above and watch the ending balance move far more than the monthly amount does.