Compound Interest Calculator
Calculate how your money can grow over time with the power of compound interest. Perfect for estimating investment returns, retirement savings, and FIRE goals.
Historically, the S&P 500 averages 7-10% annually.
Future Balance in 10 years
$106,639
Total Contributions
$70,000
Total Interest Earned
+$36,639
Wealth Growth
The Power of Time
In this scenario, 34.4% of your final wealth is generated purely from interest. By starting earlier and letting compound interest do the heavy lifting, you require significantly less of your own money to reach your financial goals.
What is Compound Interest?
Compound interest is the concept of earning interest on your original investment and on the interest it has already accumulated. Unlike simple interest, which only pays on the principal balance, compound interest causes your wealth to grow exponentially over time. Albert Einstein famously called it "the eighth wonder of the world," stating: "He who understands it, earns it; he who doesn't, pays it."
Our free online Compound Interest Calculator allows you to visualize this exponential growth. By adjusting your initial investment, monthly contributions, and time horizon, you can accurately plan for retirement, save for a house, or reach Financial Independence, Retire Early (FIRE).
The Rule of 72
The Rule of 72 is a quick mental math shortcut used in finance to estimate how long it takes an investment to double in value, given a fixed annual rate of interest.
Years to Double = 72 ÷ Annual Interest Rate
For example, if you invest $10,000 in an index fund returning 8% annually, you divide 72 by 8. This means your money will double to $20,000 in approximately 9 years without you adding a single extra penny. Play with the calculator above to see this rule in action!
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