Calculator
Compound Interest Calculator
Compound interest turns small, consistent investments into significant wealth over time. Watch the chart — notice how the growth area eventually dwarfs what you actually put in.
Your numbers
Lump sum invested today
$
Invested every month going forward
$
30 years
1 yr50 yrs
7.0%
1%15%
Inflation adjustment
Show results in today's dollars
3.0%
1%8%
Final Portfolio Value
—
Total invested
—
Interest earned
—
Growth multiple
—
Portfolio growth over time
Contributions vs. interest earned
Invested
Growth
Year-by-year breakdown
| Year | Interest earned | Portfolio value |
|---|
How it works
Monthly compounding, the honest way
1
Enter your starting investment
The lump sum you have invested today, or plan to invest at the start. Even a small amount has a dramatic effect over decades.
2
Set your monthly contribution
How much you invest each month going forward. Regular contributions are often more powerful than a large starting amount.
3
Choose your time horizon
Drag the slider to set how many years you want to model. Watch how the growth area expands dramatically as years increase.
4
Set the expected annual return
Use 7% for a historically accurate real (inflation-adjusted) return on a diversified index fund portfolio. Use 10% for nominal returns.
5
Toggle inflation adjustment
When on, results are shown in today's purchasing power. This gives you a more honest picture of what your final number is actually worth.
Monthly compounding formula
FV = P × (1+r)^n + PMT × ((1+r)^n − 1) / r
r = monthly rate · n = total months · PMT = monthly contribution
Rule of 72
Years to double ≈ 72 ÷ annual return % At 7%, your money doubles every ~10.3 years. At 10%, every ~7.2 years.
Frequently asked questions
What is compound interest?
Compound interest means your returns generate their own returns. If you earn 7% on $10,000 you get $700 in year one — but in year two you earn 7% on $10,700, giving you $749. This self-reinforcing growth accelerates over time, which is why the chart curves upward and why time in the market is so valuable.
Why does starting early matter so much?
A dollar invested at age 25 has 40 years to compound before a typical retirement age. At 7% real return, that one dollar becomes $14.97. The same dollar invested at 35 only becomes $7.61. Starting 10 years earlier nearly doubles the outcome — without investing a single extra cent.
Should I use 7% or 10% as the return rate?
Use 7% if you want to model real (inflation-adjusted) returns — this is what your money is actually worth in today's purchasing power. Use 10% for nominal returns (before inflation). The 7% real figure comes from the long-run historical average of the US stock market and is the standard used in most FIRE planning.
What does the inflation adjustment toggle do?
When enabled, the calculator subtracts an assumed 3% annual inflation from your return rate. So a 7% nominal return becomes approximately 4% real. This shows you what your final portfolio is worth in today's dollars rather than future nominal dollars. It is a more conservative and honest projection.
How does monthly vs. annual compounding affect the result?
This calculator uses monthly compounding — your contributions are invested each month and earn returns each month. This is more accurate than annual compounding for regular savers, and produces slightly higher results than annual compounding because your money starts earning returns sooner.