Investing · Growth

Compound Interest Calculator

Compound interest is the foundation of FIRE. See how your starting balance and monthly contributions snowball over time — and how much of your final wealth comes from growth rather than what you put in.

Historical S&P 500 avg: ~7% (inflation-adjusted)
Final balance
$301k
$300,851
Total invested
$130k
Investment gains
$171k
131% of what you put in
Growth over time
yr 2
$24k
yr 4
$41k
yr 6
$60k
yr 8
$82k
yr 10
$107k
yr 12
$135k
yr 14
$169k
yr 16
$207k
yr 18
$250k
yr 20
$301k
Contributions
Investment gains

How compound interest works

Compound interest means you earn returns not just on your original investment, but also on all the returns you've already earned. The longer you stay invested, the more your gains compound on themselves.

Formula: A = P(1 + r/n)^(nt) + PMT × [(1 + r/n)^(nt) − 1] / (r/n)
where P is principal, r is annual rate, n is compounding periods per year, t is years, PMT is monthly contribution.

For FIRE planning, the 7% figure (inflation-adjusted historical S&P 500 average) is the standard assumption. Starting early matters more than saving more — 10 extra years of compounding often outperforms doubling your monthly contribution.

Compound Interest Calculator: See Your Investments Grow

Compound interest earns returns on both your contributions and the growth they have already produced — the force that turns steady investing into financial independence. Set your starting balance, monthly contribution, and expected return above to watch the curve bend upward over time.

Once you see how your money compounds, turn it into a retirement date with the FIRE calculator, or size your target with the FIRE number calculator. Read more in compound interest and FIRE.

Compound interest FAQ

What is compound interest?

Compound interest is interest calculated on both your initial principal and the interest already accumulated. Unlike simple interest, compounding grows exponentially over time. For example, $10,000 invested at 7% grows to $19,672 after 10 years with compound interest, versus $17,000 with simple interest.

How does compound interest affect FIRE planning?

Compound interest is the engine behind FIRE (Financial Independence Retire Early). Starting earlier gives your money more time to compound, dramatically shortening the timeline to financial independence. Investing $500/month starting at age 25 instead of 35 can result in more than double the portfolio at retirement due to compounding.

What is the Rule of 72?

The Rule of 72 is a quick way to estimate how long it takes to double your money at a given interest rate. Divide 72 by your annual return rate. At 7% returns, your money doubles approximately every 72 ÷ 7 = 10.3 years. At 10% returns, it doubles every 7.2 years.