See how your money grows over time with the magic of compounding
Compound interest is the most powerful force in finance. Earn interest on your interest, reinvest, and watch small amounts become life-changing wealth over decades.
Year 1: $1,000 at 8% = $1,080. Year 2: $1,080 × 1.08 = $1,166. By year 30: $10,063. The longer you wait, the more dramatic the curve.
Divide 72 by your interest rate to find years to double. At 8%: money doubles every 9 years. At 10%: every 7.2 years. At 4% (HYSA): every 18 years.
$200/month invested from age 25 to 35 (then stopped) beats $200/month from age 35 to 65. Time > amount.
Time and contribution rate, in that order, and by a wide margin. Rate of return gets the attention and is the one you control least. Someone investing $500 a month for 30 years at 7% ends up with substantially more than someone investing $1,000 a month for 15 years at the same rate, despite contributing the same total — because the first person's early contributions compound for twice as long. This is why "start now with a small amount" is not a platitude; the first years carry disproportionate weight and cannot be bought back later.
Annual, monthly and daily compounding at the same nominal rate produce close but different results, and the gap is small compared to the effect of one extra year of contributions. 7% compounded annually and 7% compounded monthly differ by roughly a fifth of a percentage point in effective yield. It is worth understanding, and it is not worth choosing an investment over. The number that deserves that scrutiny is the fee.
A 1% annual fee does not cost 1%. It costs 1% of a growing balance every year, compounding against you for the whole period, and over thirty years it commonly removes a fifth or more of the final balance compared to a 0.05% index fund on identical returns. Run the same scenario twice in the calculator — once at your expected return, once at that return minus your fee — and the difference is the fee's real price. It is usually the largest single controllable number in the whole plan.
A projection at 7% a year is a nominal figure. Inflation reduces what that money buys, and a balance that looks transformative in thirty years buys considerably less than the same number today. The straightforward fix is to run the calculator at a real return — your expected nominal return minus your inflation assumption — which gives a figure in today's purchasing power. It is a smaller and much more honest number to plan against, and it avoids the common shock of reaching a target that turns out not to cover the life it was supposed to fund.
Markets do not return a smooth percentage. A 7% long-run average is made of very good years and very bad ones, and the order they arrive in matters if you are withdrawing rather than accumulating. Use this to compare scenarios — this contribution against that one, this fee against that one, starting now against starting in three years — rather than to predict a balance. The comparisons are reliable even where the absolute number is not.
The Coast FIRE calculator turns the same compounding into one number: how much you need invested today to stop saving for retirement.
For a savings account quoted as an APY, the high-yield savings calculator handles deposits and tax.
The Roth IRA calculator applies the same compounding inside a Roth, with the 2026 contribution limits.
Compare with simple interest, add an inflation adjustment, or solve for the monthly deposit, years or rate a goal needs.
Dividends reinvested into more shares compound the same way; model a dividend stock or fund with its own yield and growth.
Returns earned on your previous returns as well as on your original money. Each period's growth becomes part of the base that grows next period, which is why the balance curve steepens over time rather than rising in a straight line.
Less than most people expect. Monthly versus annual compounding at the same nominal rate differs by roughly a fifth of a percentage point in effective yield. One extra year of contributions matters far more, and so does the fee.
Far more than the headline percentage, because the fee applies to a growing balance every year. Over thirty years, a 1% annual fee commonly removes a fifth or more of the final balance compared with a low-cost index fund on identical returns. Run the calculator twice — once at your return, once at return minus fee — to see it.
Real, if you want a figure you can plan a life against. Subtract your inflation assumption from your expected return and the result is in today's purchasing power, which is a smaller and more honest number than the nominal projection.
Tax rules, limits and pay data change. Check the current figures with the primary source before acting on them.