See how your investments grow over time with the power of compound interest. Enter your initial investment, monthly contributions, expected return, and time horizon to project your future wealth.
| Initial Investment | Annual Rate | After 10 Years | After 20 Years | After 30 Years |
|---|---|---|---|---|
| $10,000 | 5% | $16,289 | $26,533 | $43,219 |
| $10,000 | 7% | $19,672 | $38,697 | $76,123 |
| $10,000 | 10% | $25,937 | $67,275 | $174,494 |
| $50,000 | 7% | $98,358 | $193,484 | $380,613 |
| Starting Amount | Monthly Add | Rate | After 20 Years | After 30 Years |
|---|---|---|---|---|
| $0 | $500 | 7% | $260,463 | $566,765 |
| $10,000 | $500 | 7% | $299,160 | $642,888 |
Historical S&P 500 average annual return (1957–2024): approximately 10.5% before inflation, ~7.5% after inflation. Source: Federal Reserve and BLS CPI data.
Compound interest is interest calculated on both the initial principal and the accumulated interest from previous periods. Unlike simple interest, compound interest grows exponentially over time, which is why it is called 'the eighth wonder of the world.'
Interest can compound daily, monthly, quarterly, or annually. The more frequently interest compounds, the faster your money grows. Daily compounding yields slightly more than monthly, which yields more than annual compounding.
The Rule of 72 is a quick way to estimate how long it takes to double your money. Divide 72 by your annual interest rate. At 6%, your money doubles in approximately 12 years (72 ÷ 6 = 12). At 8%, it doubles in 9 years.
Banks pay you interest on your balance, then add that interest to your balance. Next period, you earn interest on the larger balance. Over decades, this snowball effect can turn modest savings into substantial wealth.