Compound Interest Calculator

Compound interest is often called the eighth wonder of the world, and for good reason. Unlike simple interest, which only earns returns on your original deposit, compound interest earns returns on your accumulated interest too. This creates an exponential growth curve that becomes more dramatic over time. A $10,000 investment at 7% annual return grows to about $76,000 in 30 years without any additional contributions. Add $500 per month, and that number climbs to over $680,000. The earlier you start, the more time compounding has to work in your favor.

Consistent monthly contributions are one of the most effective ways to build wealth. Even modest amounts add up significantly when combined with compound interest over decades. This strategy, known as dollar-cost averaging, also helps smooth out market volatility since you buy more shares when prices are low and fewer when prices are high. The key is consistency rather than timing. Someone who invests $200 per month for 30 years at a 7% return will accumulate roughly $227,000 — with only $72,000 of that being their own contributions. The rest is pure compound growth.

The annual return rate you enter has a massive impact on projections, so choosing a realistic number matters. Historically, the S&P 500 has returned about 10% annually before inflation, or roughly 7% after inflation. High-yield savings accounts typically offer 4-5% in favorable rate environments. Bond funds average around 4-6%. For conservative planning, many financial advisors suggest using 6-7% for stock-heavy portfolios. Remember that real returns fluctuate year to year — this calculator shows a smoothed projection, not a guarantee of actual performance. To plan toward a specific dollar target, try our Savings Goal Calculator. Our Retirement Calculator can also help you project whether your compound growth will sustain your desired retirement income.