The Eighth Wonder
Compound Interest Calculator
Watch small, regular contributions snowball. Model your savings or investment growth over decades, in your own currency.
Your plan
Savings accounts: ~2–5%. Long-run diversified shares: ~7–10% before inflation.
Where you end up
Final balance
You put in
Growth earned
Growth over time
Balance by yearThe Long Game
Why time beats timing
In compound growth, the biggest gains arrive in the final years. The earlier you start, the more of those explosive late years you capture.
The rule of 72
Divide 72 by your annual return to estimate how many years your money takes to double. At 7%, that's roughly every 10 years — so a 30-year horizon means about three doublings, turning one dollar into eight.
Mind tax and inflation
The figures here are gross. Interest and gains are usually taxed, and inflation eats purchasing power — at 3% inflation, money halves in real value about every 24 years. Tax-advantaged accounts (super, 401(k), ISAs) and returns above inflation are what create real wealth. Check the inflation calculator to see your result in today's money.
Contributions do the heavy lifting early
In the first decade, most of your balance is simply money you put in — run the default example and look at the chart: for the first several years the grey contribution bars dwarf the purple growth. By year 20 the picture flips, and growth has out-earned everything you deposited. The practical lesson: early on, your savings rate matters far more than your investment skill. Squeezing an extra 1% of return from a small balance moves the needle less than adding another $100 a month.
Does compounding frequency matter?
Less than people think. $10,000 at 7% for 20 years grows to about $38,700 compounded annually versus $40,400 compounded monthly — worth having, but small next to the effect of the rate itself or of staying invested five more years. Use the dropdown to test it, then spend your energy on the inputs that really move the result: how much you save, for how long, and at what rate.
A worked example: the cost of waiting ten years
Three savers each put away $300 a month at a 7% annual return and stop at 65. The only difference between them is when they start. The table uses exactly the same maths as the calculator above — try the numbers yourself.
| Starting age | Years invested | Total deposited | Growth earned | Balance at 65 |
|---|---|---|---|---|
| 25 | 40 | $144,000 | $643,000 | $787,000 |
| 35 | 30 | $108,000 | $258,000 | $366,000 |
| 45 | 20 | $72,000 | $84,000 | $156,000 |
The saver who started at 25 deposited only twice as much as the one who started at 45 — but finished with five times the money. That gap is not investment genius; it is purely the extra doublings that time allows. Waiting from 25 to 35 "cost" $421,000 in this example, far more than the $36,000 of deposits that were skipped. If you are deciding between starting small now or starting properly later: start small now. You can always raise the monthly amount when your income grows — try the pay rise calculator to see how much of a raise actually reaches your pocket.
Frequently asked questions
How does compound interest work?
Compound interest means you earn returns on your returns. Each period, interest is calculated on your original deposit plus all previously earned interest, so growth accelerates over time — slowly at first, then dramatically in later years.
What rate of return should I assume?
Cash savings accounts typically pay 2–5%. Diversified share portfolios have historically returned around 7–10% per year before inflation over long periods, though returns vary widely year to year. Run the calculation with a conservative and an optimistic rate to see the range.
Does this calculator account for tax or inflation?
No — it shows gross growth. Interest and investment gains are usually taxable, and inflation erodes real value. Pair it with our inflation calculator to see results in today's money, and remember tax-sheltered accounts can change the picture significantly.
Should I pay off debt or invest first?
Compare the interest rate on the debt with the return you can realistically expect after tax. Paying off a loan is a guaranteed, tax-free "return" equal to its interest rate, so high-interest debt like credit cards almost always beats investing. The common exception is an employer pension or retirement match — free money at a 50–100% instant return usually comes first. This is general education, not personal advice.
How is compound growth taxed?
It depends on your country and the account you use. Bank interest is typically taxed as income every year, which slows compounding. Capital gains on shares are often only taxed when you sell, letting growth compound untaxed in the meantime. Tax-sheltered wrappers — 401(k)s and IRAs, ISAs, TFSAs, superannuation — let compounding run with little or no tax drag, which is why our guide to legally lowering your tax bill treats them as the single most powerful tool most people have.