Compound Interest Calculator
See how your investments grow over time with regular contributions and compounding. Enter your initial investment, monthly contribution, expected return, and time horizon to visualize the exponential power of compound growth with a year-by-year projection.
Educational purposes only.
This calculator illustrates the concept of compound interest with hypothetical returns. Actual investment returns vary and are not guaranteed. Past performance does not indicate future results.
Educational purposes only. These calculators illustrate concepts and do not constitute investment advice. Read our disclaimer
StockCram is not a broker-dealer, investment adviser, or financial institution. All content is for educational and informational purposes only and should not be construed as personalized investment advice. Consult a qualified financial professional before making investment decisions. Past performance does not guarantee future results.How It Works
Enter your starting amount
Type in how much you have to invest now (initial investment) and how much you plan to add each month.
Set your expected return
Choose an annual return rate and compounding frequency. 7% is a common long-term estimate for a diversified stock portfolio.
Choose your time horizon
Enter how many years you plan to invest. Longer time horizons show dramatically more growth due to compounding.
See your projected growth
View your final balance, total interest earned, and a year-by-year chart showing how your money grows over time.
Frequently Asked Questions
Compound interest is interest earned on both your initial principal and the accumulated interest from previous periods. Unlike simple interest (which only earns on the principal), compound interest creates a snowball effect where your money grows faster over time. Albert Einstein allegedly called it "the eighth wonder of the world."
More frequent compounding produces slightly higher returns because interest starts earning interest sooner. Daily compounding earns more than monthly, which earns more than annually. However, the differences are relatively small — the biggest factors are your contribution amount, rate of return, and time horizon.
The S&P 500 has historically returned roughly 10% annually before inflation (about 7% after inflation). For a conservative estimate, 6-7% is commonly used. Bond-heavy portfolios might assume 4-5%. The right number depends on your investment mix and risk tolerance. Past returns do not guarantee future results.
A common guideline is to invest 15-20% of your pre-tax income for retirement. But any amount is better than nothing — even $100/month compounded over 30 years at 7% grows to over $120,000. The calculator lets you experiment with different contribution amounts to find what works for your budget.
Time is the most powerful variable in compound interest because growth is exponential, not linear. In early years, interest earned is modest. But as your balance grows, each year's interest becomes larger and larger. This is why starting early — even with small amounts — can outperform starting later with larger amounts.
This calculator shows nominal (pre-tax, pre-inflation) returns. To approximate after-inflation returns, use a lower rate (e.g., 7% instead of 10%). Tax impact depends on account type: tax-advantaged accounts (401k, IRA, Roth IRA) grow tax-free or tax-deferred, while taxable accounts owe taxes on gains annually.
The Rule of 72 is a quick way to estimate how long it takes to double your money. Divide 72 by your annual return percentage. At 7% return: 72 ÷ 7 ≈ 10.3 years to double. At 10%: 72 ÷ 10 ≈ 7.2 years. This only applies to the initial investment without additional contributions.