Compound Interest Calculator

Simple interest is paid only on the money you put in. Compound interest is also paid on the interest you have already earned, so your balance grows faster over time.

It depends on what you invest in. Savings accounts usually pay a few percent a year, while broad stock market indexes have historically returned more over long periods, with large swings along the way. Past returns do not guarantee future results.

Inflation yes, taxes and fees no. In the advanced mode, enter the expected inflation and switch to “In today’s money” to see what your savings will buy at today’s prices. Taxes and fees depend on your country and product, so lower the expected return by your expected costs.

A quick estimate is the rule of 72: divide 72 by the annual return. At 7 % a year your money doubles in about 72 ÷ 7 ≈ 10.3 years (the exact figure is 10.2 years). At 4 % it takes about 18 years.

Banks compound daily, monthly or yearly, and more frequent compounding grows your money slightly faster. Under the expected return you can choose how interest is credited: Yearly treats the number as the effective annual return, Monthly as a nominal rate with one twelfth credited every month, the way savings accounts usually work. For example, 5 % a year compounded monthly equals an effective 5.12 %.

Because compound interest needs time. With $500 a month at 7 % a year, 20 years grow to about $254,000 and 30 years to about $585,000. The extra ten years cost only $60,000 more in contributions but add about $331,000 to the result.

The average return is the simple average of yearly returns; CAGR is the rate at which the money actually grew. If an investment gains 50 % and then loses 50 %, the average return is 0 %, but 100 turns into 75. That is why the scenarios use CAGR from history, while the Monte Carlo simulation uses the average and the volatility.

Instead of one fixed return, it simulates a thousand possible market paths with random good and bad years. The result is not one number but a range: in the chart you see where most of the outcomes end up and how far apart the pessimistic and optimistic cases are.

Yes – with debt. Unpaid interest on credit cards or consumer loans is added to the balance and charged interest again. A debt at 20 % a year that you do not repay grows about 2.5 times in five years, so paying off expensive debt usually beats investing.