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Compound Interest Calculator

Learn how compound interest works, then use the calculator below to model your own investments.

Compound interest is interest calculated on both your original principal and the interest you've already earned. Your interest earns interest — and that snowball effect is what makes it so powerful over time.

Example: You invest $10,000 at 7%. After year one you earn $700, reaching $10,700. In year two, you earn 7% on $10,700 — not just the original $10,000. Small at first, enormous over decades.
$76,122
$10k @ 7% · 30 yrs
with compounding
$31,000
$10k @ 7% · 30 yrs
simple interest
2.5×
More money from compounding over 30 years
A = P(1 + r/n)nt
A = Final amount
P = Principal
r = Annual rate (decimal)
n = Times compounded/year
t = Time in years

Here's how compounding frequency affects $10,000 at 7% over 10 years:

FrequencyTimes/yrBalanceInterest
Annually1×$19,672$9,672
Quarterly4×$19,990$9,990
Monthly12×$20,097$10,097
Daily365×$20,136$10,136

Simple interest only earns on your original principal. Compound interest earns on your principal plus all accumulated interest. The gap widens dramatically over time.

YearSimple ($10k @ 7%)Compound ($10k @ 7%)Difference
5$13,500$14,026+$526
10$17,000$19,672+$2,672
20$24,000$38,697+$14,697
30$31,000$76,123+$45,123
Key takeaway: The longer your time horizon, the more dramatic the gap. Starting early — even with small amounts — beats investing larger amounts later.
  1. 1
    Enter your initial investment
    The lump sum you're starting with today. Even $500 shows real impact.
  2. 2
    Set your expected rate of return
    The S&P 500 has averaged ~10%/yr before inflation (~7% after). Use 6–8% for a conservative estimate.
  3. 3
    Add a regular contribution
    Consistent contributions often matter more than your starting amount.
  4. 4
    Choose your time horizon
    Try 10 vs. 30 years — the last decade often accounts for more than half of total growth.
  5. 5
    Compare scenarios
    Use "+ Add comparison" to run side-by-side projections — great for "now vs. 5 years later."
  • ⏰
    Start as early as possible
    Investing $5k/yr from ages 25–35 then stopping often beats investing $5k/yr from 35–65. Time is your greatest asset.
  • 🔄
    Reinvest dividends automatically
    Enable DRIP at your brokerage so dividends automatically buy more shares — zero extra effort.
  • 📈
    Increase contributions over time
    Even a 1% annual raise to your contribution has an outsized impact over decades.
  • 🛡️
    Use tax-advantaged accounts
    A Roth IRA or 401(k) shields your growth from tax drag. Roth qualified withdrawals are completely tax-free.
  • 💸
    Minimize fees relentlessly
    A 1% fee on $500k can cost $150,000+ in lost compounding over 20 years. Use index funds under 0.10% expense ratio.
For a diversified stock portfolio, the historical average is ~10%/yr before inflation (~7% after). For a conservative stock/bond mix, 5–6% is reasonable. High-yield savings accounts currently offer 4–5%, but fluctuate with the federal funds rate.
Most high-yield savings accounts compound daily and credit monthly. Brokerage accounts don't compound directly — stock appreciation and reinvested dividends create the effect. CDs typically compound daily or monthly.
No — it shows nominal returns. To see inflation-adjusted results, subtract your expected inflation rate from your rate of return before entering it. E.g., 8% returns − 3% inflation = enter 5%.
APR is the simple rate without compounding. APY reflects the actual return after compounding. A 5% APR compounding daily has an APY of ~5.13%. Always compare APY to APY when evaluating savings products.
When investing, yes. When borrowing, it works against you. Credit card debt compounds daily at 20–30%. Pay off high-interest debt first — eliminating 20% debt is a guaranteed 20% return.

Investment Details

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Contribution ·
$
Compound Frequency ·
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Side-by-side comparison

BrokerCommissionFractionalIRAMin.
Fidelity$0✓ Yes✓ Yes$0Open →
Robinhood$0✓ Yes✓ Yes$0Open →
Tastytrade$0— No✓ Yes$0Open →
Vanguard$0✓ Yes✓ Yes$0Open →
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