Compound Interest Calculator See how your money grows over time with compounding — the most powerful force in finance. ...
Compound Interest Calculator
See how your money grows over time with compounding — the most powerful force in finance.
Compound interest is interest calculated on both the initial principal *and* the accumulated interest from previous periods — “interest on interest.”
Formula: $$A = P \left(1 + \frac{r}{n}\right)^{nt}$$ where: • $A$ = final amount • $P$ = principal • $r$ = annual rate • $n$ = compounding periods/year • $t$ = time in years
Example: $10,000 at 7% for 30 years:
• Simple interest: $10,000 + ($10,000 × 0.07 × 30) = **$31,000**
• Compound interest: **$76,123** — 145% more!
A quick way to estimate how long it takes to *double* your money:
$$ \text{Years to Double} = \frac{72}{\text{Annual Return (\%)}} $$
- 6% return → 72 ÷ 6 = **12 years** to double
- 8% return → **9 years**
- 10% return → **7.2 years**
At 7% (historical S&P 500 real return), money doubles every **10.3 years**. → In 30 years: doubles ≈ 3 times → 8× growth (matches $10K → $80K).
Warren Buffett’s secret: His net worth grew 99% *after age 50* — thanks to 60+ years of compounding at ~20%.
Small costs compound *against* you:
- Fees — A 1% annual fee on a $100K portfolio @ 7% return reduces 30-year value by **~28%** ($761K → $549K).
- Taxes — In a taxable account, annual capital gains tax (15%) cuts effective return by ~1% — turning 7% into ~6%.
- Inflation — 3% inflation means $1M in 30 years has the purchasing power of **$412,000 today**.
- Behavior — Missing the S&P 500’s 10 best days in 20 years cuts returns by **>50%**.
✅ Solution: Use tax-advantaged accounts (401k, IRA, HSA), low-cost index funds (e.g., VTI), and stay invested.
➡️ Basic
See how a lump sum grows (e.g., inheritance, settlement).
➡️ With Contributions
Model retirement savings (e.g., $500/mo for 30 years).
➡️ Time to Goal
“How long to $1M?” — inverse calculation.
➡️ Inflation Adjusted
See real purchasing power (e.g., “Will $1M be enough in 2050?”).
Toggle Tax Treatment to compare Roth vs. Traditional vs. taxable accounts.
Note: Calculations assume constant return. Real markets fluctuate — use as a planning tool, not a guarantee.