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Visualize compound growth over time with regular contributions. Free, with year-by-year chart.
Final balance after 20 years
$144,572.72
Growth over time
Compound interest is the most powerful idea in personal finance — but only for people with the time horizon to let it work. A small amount invested early nearly always beats a larger amount invested late, because compounding is exponential in time.
| Annual rate | Years to double | Years to 4× (double twice) |
|---|---|---|
| 3% | 24.0 | 48.0 |
| 5% | 14.4 | 28.8 |
| 7% | 10.3 | 20.6 |
| 10% | 7.2 | 14.4 |
| 15% | 4.8 | 9.6 |
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Compound interest is interest earned not just on your original investment but also on the interest that accumulates over time. Each period, the new interest gets added to the balance and earns interest in the next period — which is why compound returns grow exponentially rather than linearly.
The base formula is: A = P × (1 + r/n)^(n×t), where P is principal, r is annual rate, n is compounding periods per year, and t is years. When you add regular contributions, the math gets more involved — you're essentially running this formula on each contribution separately and summing the results. This calculator handles both at once.
Less than people expect. The gap between annual and daily compounding on a 7% rate over 20 years is only about 4–5%. The variables that dominate are the rate and the time horizon — doubling either one will outweigh any compounding-frequency optimization.
A quick mental shortcut: divide 72 by the annual interest rate to get the approximate years needed to double your money. At 7%, money doubles every ~10.3 years. At 10%, every ~7.2 years. At 3%, every 24 years. Useful for sanity-checking long-term projections without a calculator.
Historical US stock market average is ~10% nominal, ~7% real (after inflation). For planning, most advisors suggest 5–7% real returns to avoid overestimating. Bonds typically return 2–4%, cash 0.5–2%. Diversified portfolios typically land at 5–8% depending on stock-bond mix.
Enormously over long horizons. $200/month added to a $10k starting balance for 20 years at 7% grows from ~$39k (no contributions) to ~$143k — the contributions themselves add ~$48k in principal plus ~$56k in growth on those contributions. Consistent contributions often outweigh the starting principal's contribution by decade 2.
