Compound Interest Calculator

Harness the power of compound interest to grow your wealth. Calculate investment returns, savings growth, and see how time and compounding work together

✓ Interest Calculation ✓ Growth Visualization ✓ Multiple Scenarios

Calculate Compound Interest

Investment Parameters

Initial investment amount

Expected annual return

Investment duration

Additional Contributions

Regular monthly additions

Yearly increase in contributions

Tax on gains (0 for tax-deferred accounts)

Expected annual inflation

Compound Interest Formula

A = P(1 + r/n)^(nt)
Where:
A = Final amount
P = Principal
r = Annual interest rate
n = Compounding frequency
t = Time in years

Investment Examples

Conservative Portfolio
$10k at 5% for 30 years
Aggressive Growth
$5k + $500/month at 10%
Retirement Savings
$25k + $1k/month at 8%

Power of Compounding

✓ Earnings generate their own earnings
✓ Growth accelerates over time
✓ Time is your greatest ally
✓ Small differences compound dramatically
✓ Start early for maximum benefit

Historical Returns

S&P 500 (1957-2023): ~10.5%
Bonds (10-year Treasury): ~5-6%
Real Estate: ~4-6%
High-Yield Savings: ~4-5%
Inflation (US Average): ~3.2%
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Understanding Compound Interest

Compound interest is the addition of interest to the principal sum of a loan or deposit, where interest earned also earns interest.

  • Simple vs Compound: Compound interest grows exponentially
  • Frequency Matters: More frequent compounding = higher returns
  • Time Factor: Earlier start = dramatically better results
  • Rate Impact: Small rate differences have huge long-term effects

Maximizing Compound Growth

Start Early

Time is the most powerful factor in compound growth. Start investing as early as possible.

Consistent Contributions

Regular contributions amplify the compounding effect significantly.

Reinvest Returns

Always reinvest dividends and interest to maximize compounding.

Tax-Advantaged Accounts

Use 401(k)s, IRAs, and other tax-deferred accounts to maximize growth.