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Compound Interest Calculator

See the power of compounding — watch your investment grow exponentially over time.

Calculate Compound Growth

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S&P 500 historical average: ~10% (7% inflation-adjusted). HYSA: ~4-5%.
Total Value After 20 Years
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Total Invested
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Total Growth
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Growth Multiple
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Return on Investment

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See what happens if you change your contribution or start earlier.

Why Compound Interest Is Called the 8th Wonder

Einstein (allegedly) called compound interest the eighth wonder of the world: "He who understands it, earns it; he who doesn't, pays it." The key insight is that you earn returns not just on your principal, but on all the returns you've already accumulated.

At 8% annual return, money roughly doubles every 9 years (Rule of 72: 72 ÷ 8 = 9). This means $10,000 invested today becomes $20,000 in 9 years, $40,000 in 18 years, and $80,000 in 27 years — without adding another dollar.

The most powerful factor is time. Starting at 25 vs. 35 can mean the difference between retiring comfortably and working an extra decade.

Compound Interest FAQ

What is compound interest?
Compound interest means you earn interest on your interest. Each compounding period, your interest is added to the principal, and next period you earn interest on the new, larger total. Over long periods, this creates exponential — not linear — growth.
What's the Rule of 72?
Divide 72 by your annual interest rate to estimate how many years it takes your investment to double. At 8% return, 72 ÷ 8 = 9 years to double. At 10%, it doubles every 7.2 years. At 6%, every 12 years.
How does compounding frequency affect returns?
More frequent compounding means slightly higher returns. The difference between annual and monthly compounding on $10,000 at 8% over 20 years is only about $1,500. The compounding frequency matters far less than the rate and time horizon.
What return rate should I use for investments?
The S&P 500 has historically returned ~10% annually, or ~7% after inflation. A diversified portfolio might use 6%–8% for conservative projections. For savings accounts or CDs, use the current APY (typically 4%–5%). Past returns don't guarantee future results.
When does compound interest work against you?
When you're the borrower. Credit card companies use compound interest on your balance, which is why minimum payments barely make a dent. The same math that grows investments exponentially also grows debt exponentially if left unchecked.