Compound Calc

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.

Basic

With Contributions

Time to Goal

Inflation Adjusted

Principal ($)

Annual Interest Rate (%)

Years

Compounding Frequency Daily Monthly Quarterly Annually

Initial Investment ($)

Regular Contribution ($)

Frequency Monthly Annually

Years

Annual Rate (%)

Current Savings ($)

Target Amount ($)

Annual Return (%)

Principal ($)

Years

Investment Return (%)

Inflation Rate (%)

Tax Treatment Tax-Deferred (e.g., Traditional 401k/IRA) Taxable Account (capital gains taxed annually) Roth (tax-free growth & withdrawals)

Affects net return: Taxable mode assumes 15% long-term capital gains rate.

$0

Final Amount

$0

Total Contributions

$0

Interest Earned

$0

Inflation-Adjusted

Growth Over Time

Linear

Semi-Log

Breakdown

What Is Compound Interest?

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!

The Rule of 72

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%.

Hidden Drags on Compounding

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.

How to Use This Calculator

➡️ 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.