Compound Interest Calculator
See how your money grows with compound interest and regular contributions.
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Compound interest is the most powerful force in personal finance. This calculator shows how your money grows when interest earns interest over time. Enter your starting amount, monthly contributions, expected return rate and time horizon to see the future value. The S&P 500 has historically returned about 7% after inflation, making it a common benchmark for long-term projections.
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Frequently asked questions
Compound interest means you earn interest on your interest, not just on the original amount. If $10,000 earns 7% ($700) in year one, year two earns 7% on $10,700 ($749), and so on. This snowball effect accelerates growth over time.
For stock market investments, 7% after inflation (10% before inflation) is the historical S&P 500 average. For savings accounts, use 4-5%. For bonds, use 3-5%. Be conservative in your estimates.
More frequent compounding yields slightly more. Monthly compounding at 7% gives an effective annual rate of 7.23%. For stock investments, monthly is standard. Savings accounts typically compound daily.
$10,000 at 7% for 20 years grows to $38,697. But $10,000 plus $200/month grows to $142,817 - the $48,000 in contributions generated an extra $56,000 in interest through the power of consistent investing.
APR (annual percentage rate) is the stated rate. APY (annual percentage yield) accounts for compounding. A 7% APR compounded monthly has an APY of 7.23%. APY shows what you actually earn.