See how your money grows over time with compound interest. Enter your principal, interest rate, contributions, and compounding frequency for a year-by-year breakdown.
Enter your investment details and click Calculate Growth to see compound interest results.
Compound interest is the most powerful concept in personal finance. Unlike simple interest, which is calculated only on the principal, compound interest earns interest on your interest — creating exponential growth over time.
The standard formula for compound interest (without additional contributions) is:
A = P(1 + r/n)nt
Example: $10,000 invested at 7% compounded monthly for 10 years: A = $10,000 × (1 + 0.07/12)120 = $10,000 × 2.0097 = $20,097. Your money has more than doubled, earning $10,097 in interest alone.
When you add regular monthly contributions (C), the future value of those contributions is calculated separately using the future value of an annuity formula and added to the compounded principal.
The difference between simple and compound interest is dramatic over time, and it grows wider as the time horizon lengthens:
Over 30 years, the gap becomes enormous: simple interest yields $31,000 while monthly compounding yields $81,165. The longer your money compounds, the greater the advantage. This is why financial advisors emphasize starting early — even small amounts grow substantially with decades of compounding.
The Rule of 72 is a quick mental math shortcut for estimating how long it takes for an investment to double in value. Simply divide 72 by the annual interest rate to get the approximate doubling time in years.
This rule is most accurate for interest rates between 4% and 12%. It works because ln(2) ≈ 0.693, and 72 is a convenient approximation that is divisible by many common rates. For more precise estimates at higher rates, use 69.3 instead of 72.
The power of starting early: If you invest $200/month starting at age 25 at a 7% annual return, you will have approximately $528,000 by age 65. If you wait until age 35 to start the same investment, you will have only about $244,000 — less than half. Those 10 extra years of compounding are worth more than $284,000, even though the additional contributions are only $24,000.