What is compound interest?
Compound interest is the process of earning returns not only on your original investment but also on the interest that has already been added over time. This can lead to significantly higher growth compared with simple interest.
Compound growth becomes more powerful the longer your investment remains invested and the more frequently it compounds.
How this calculator works
This calculator estimates future value using an initial investment, recurring monthly contributions, an annual interest rate, and the selected compounding frequency. It then compares your total contributions with the final balance to estimate how much growth came from interest.
Rule of 72
The Rule of 72 is a simple way to estimate how long it takes for an investment to double. Divide 72 by the annual interest rate.
For example, at 8% annual growth, an investment may roughly double in about 9 years.
Balance milestones
This calculator also estimates how your balance may grow at different points in time:
- Enter values to see milestones.
Frequently asked questions
What is the difference between contributions and interest earned?
Contributions are the total amount of money you personally add. Interest earned is the growth generated by compounding over time.
Why does compounding frequency matter?
More frequent compounding can slightly increase the final balance because interest is added more often.
Does this calculator include taxes or fees?
No. This calculator focuses on growth assumptions only and does not account for taxes, fund fees, or inflation.
Can I use this for any currency?
Yes. The calculator uses plain numbers, so it can work with dollars, euros, pounds, pesos, or other currencies.