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Compound Interest Calculator

Calculate how investments grow with compound interest over time.

What does this tool do?

Compound interest means you earn returns on your returns — your money grows exponentially rather than linearly. A $10,000 investment at 7% for 30 years does not grow to $31,000 (simple interest). It grows to $76,123 — because each year's gains are added to the principal, and next year's gains are calculated on that larger amount. The longer the time horizon, the more dramatic the compounding effect. Einstein is often (mis)quoted as calling it the eighth wonder of the world. Whether he said it or not, the math is remarkable.

How to use it

  1. Enter your initial investment (principal).
  2. Enter the annual interest rate. For long-term stock market projections, 7% is a common conservative estimate (S&P 500 inflation-adjusted average).
  3. Set how often interest compounds — monthly is most common for savings accounts.
  4. Enter the number of years.
  5. See the future value, total interest earned, and how much of the final amount is your original investment vs. returns.

Pro tips

  • Starting 10 years earlier roughly doubles your final value — time is the most powerful variable, more than rate.
  • The S&P 500 has averaged approximately 10% annually before inflation and 7% after inflation over the long term — use 7% for conservative planning.
Example

$10,000 invested | 7% annual rate | Compounded monthly | 30 years

Future value: $76,123
Original investment: $10,000
Interest earned: $66,123

Your money grew by 661% without adding another dollar.

When would you use this?

  • Projecting how a retirement account or ISA will grow over time
  • Comparing savings accounts with different interest rates or compounding frequencies
  • Understanding the true cost of leaving money in a low-interest account for years
  • Motivating yourself to invest earlier rather than waiting until you have "more money"