See how savings grow with compound interest
Enter a starting amount, a monthly contribution, an annual interest rate, the number of years and how often interest compounds. You get the projected balance, how much of it you contributed, how much came from interest, and a year-by-year table.
Why starting early matters so much
Compound interest earns interest on previous interest, so time does most of the work. Investing 200 dollars a month at a 7% return grows to about 525,000 dollars over 40 years, from 96,000 dollars of contributions. Start ten years later and the same 200 dollars a month reaches only about 244,000. Ten fewer years of saving, 24,000 dollars less paid in, and less than half the result.
Compounding frequency
Interest that compounds more often grows a little faster: 10,000 dollars at 6% for ten years becomes about 17,908 compounded yearly and about 18,220 compounded daily. The rate and the time matter far more than the frequency.
A tip for savings accounts: banks quote an APY, which already includes the effect of compounding. To match a stated APY exactly, enter it as the rate and choose Annually.
The rule of 72
Divide 72 by the annual return to estimate how many years it takes to double your money. At 6% that is about 12 years; at 9%, about 8. It is a quick sanity check on any projection.
Two things that shrink the result
- Inflation. The calculator shows future dollars. To see the result in today's money, enter a real return instead: 7% with 2.5% inflation is about 4.4% real. The 40-year example then comes to about 261,000 in today's dollars.
- Fees. A 1% annual fund fee turns a 7% return into 6%. Over 40 years of 200 dollars a month, that drops the result from about 525,000 to about 398,000. Low-cost index funds keep more of the compounding for you.
Estimates only, not financial advice. Investment returns are not guaranteed and vary from year to year. Taxes are not included.