Compound Interest Calculator

Simple interest is calculated only on the principal. Compound interest is calculated on the principal plus all previously earned interest, causing your balance to grow exponentially over time — this is the "interest on interest" effect that makes long-term investing so powerful.

The Rule of 72 estimates how long it takes to double your money: divide 72 by your annual return rate. At 7% annual return, your investment doubles in roughly 72 ÷ 7 = 10.3 years. It's a quick mental shortcut — this calculator gives you the exact figure.

The difference between monthly and daily compounding is small — on $10,000 at 7% for 20 years, daily compounding adds about $100 more than monthly. What matters far more is the interest rate, time horizon, and consistent monthly contributions.

Historically, the S&P 500 has returned about 10% annually before inflation, or roughly 7% after inflation. High-yield savings accounts currently offer 4–5%. Bonds average 3–5%. Use multiple scenarios — try 5%, 7%, and 10% — to see a range of outcomes for your situation.