Compound Interest Calculator

Compound interest is interest calculated on both your original principal and the interest you've already earned. Over time, this creates exponential growth — sometimes called "the snowball effect" — because each period you're earning returns on a larger base.

For example, $10,000 earning 7% annually becomes about $19,700 after 10 years without any additional contributions — purely because interest compounds on itself.

Adding $500 per month consistently doesn't just add $6,000 per year — each dollar you add also earns compound returns from the day you invest it. Over 25 years at 7%, that $500/month turns into roughly $380,000 in contributions and roughly $793,000 in total balance (contributions + growth combined).

The earlier you start consistent contributions, the more time each dollar has to compound.

Increasing your monthly contribution by even $50–100 per year can have an outsized impact over 20+ years. If you increase your contribution by $50 every 12 months starting from $500/month, your total balance over 25 years can be dramatically higher than staying flat.

Use the "Contribution Increase" fields above to model this effect for your situation.

A "nominal" return shows your dollar balance in future dollars without adjusting for purchasing power. If inflation averages 3% annually, $1,000,000 in 30 years has roughly the same purchasing power as about $412,000 today.

The "today's dollars" figure in the results adjusts for inflation, helping you understand what your projected balance would actually be worth in current purchasing power.

The U.S. stock market (S&P 500) has historically returned roughly 10% annually before inflation, or about 7% after inflation. However, past performance does not guarantee future results, and individual investors typically hold diversified portfolios with lower average returns.

Common assumptions: 6% (conservative), 7–8% (moderate), 9–10% (optimistic). If you're holding bonds, CDs, or cash alongside equities, lower the blended rate accordingly. We recommend testing multiple return assumptions to understand the range of outcomes.