Compound Interest Calculator

Compound interest is sneaky — it looks slow at first, then suddenly looks ridiculous. Enter an initial deposit, a recurring contribution, an expected annual return, and a time horizon — see how the balance grows year by year, how much of it is your money and how much is interest, and watch the curve bend up.

How to use the compound interest calculator

1. Enter your initial deposit — the starting balance.
2. Add a recurring contribution and pick a frequency (monthly, bi-weekly, or yearly).
3. Set the expected annual return. 7% is a reasonable long-run estimate for a diversified stock portfolio (before inflation).
4. Choose a time horizon and a compounding frequency (annual, quarterly, monthly, or daily).
5. Read the projected balance, the total you contributed, and the interest earned. The chart shows the gap between balance and contributions widening over time — that gap is compounding.

Example: $10k start, $500/month, 7% return, 20 years

After 20 years your balance is roughly $295,000. You contributed $130,000 ($10k initial + $120k of monthly contributions). $165,000 — more than 56% — is interest. That's the power of letting compounding do its thing.

The rule of 72

Divide 72 by your annual return rate to get the approximate number of years for your money to double. At 4%, money doubles every 18 years; at 7%, every 10.3 years; at 10%, every 7.2 years. It's not exact but it's surprisingly close for the range of returns most people see.

Nominal vs. real return

The 7% return commonly cited for stocks is a nominal return. Subtract 2–3% for inflation to get a real return of roughly 4%–5%. Over 30 years, the difference between nominal and real is enormous — a $1M nominal balance might buy what $400k–$500k buys today. For long-horizon planning, model real returns to keep purchasing power realistic.