Compound Interest Calculator
See how your investments grow with compound interest. Interactive charts, scenario comparison, retirement planner, FIRE calculator, and financial insights — all in your browser.
Investment Details
- 💰 Compound interest earned you $213.8K — that's 164% more than your total contributions of $130.0K.
- ⏰ Rule of 72: At 8% annual return, your money doubles every 9.0 years.
- 📈 Your initial $10.0K investment grew 34.4× to $343.8K.
- 🚀 Starting 10 years earlier adds $230.1K — the #1 wealth-building lever is time.
- 🎯 62% of your final $343.8K came from compound growth, not your contributions.
What Is Compound Interest?
Compound interest is interest calculated on both the initial principal and all accumulated interest from previous periods. Unlike simple interest — which only grows proportionally to the principal — compound interest grows exponentially. This is why Albert Einstein reportedly called it "the eighth wonder of the world."
The longer you invest, the more dramatic the effect. In the early years, compound interest adds modest amounts. But after 20–30 years, interest earned on interest can dwarf your actual contributions — often accounting for 60–80% of your final portfolio.
Compound Interest Formula
This calculator simulates month-by-month compounding for maximum accuracy, regardless of the compounding frequency selected. The effective annual rate (EAR) accounts for intra-year compounding and is always slightly higher than the stated annual rate.
How Compounding Frequency Affects Growth
The more frequently interest compounds, the faster your money grows. Here's how a $10,000 investment at 8% annual return grows differently over 30 years by compounding frequency:
Daily: $109,357 (EAR: 8.328%)
Monthly: $109,357 — practically identical to daily
Quarterly: $107,652 (EAR: 8.243%)
Annually: $100,627 (EAR: exactly 8%)
Most index funds and savings accounts compound monthly. For high-yield savings accounts, daily compounding can add meaningful extra return over time.
The FIRE Movement — Financial Independence, Retire Early
FIRE stands for Financial Independence, Retire Early. The goal is to accumulate enough invested assets that the annual returns from your portfolio cover your living expenses — allowing you to stop working, or work only on projects you choose.
The most common framework is the 4% rule: if you withdraw 4% of your portfolio per year, your portfolio will sustain itself indefinitely based on historical market returns. This means your FIRE number = 25× your annual expenses.
Lean FIRE targets a frugal lifestyle, using a 5% withdrawal rate (20× expenses).
Fat FIRE targets a more comfortable lifestyle, using a 3% withdrawal rate (33× expenses).
Coast FIRE is the amount you need today so future growth alone covers your FIRE number.
Frequently Asked Questions
What is compound interest?
Compound interest is interest calculated on both the principal and accumulated interest. Unlike simple interest, it grows exponentially — earning "interest on interest" every period.
What is the compound interest formula?
A = P × (1 + r/n)^(nt), where P = principal, r = annual rate, n = compounds per year, t = years. With monthly contributions (PMT): A = P(1+r/n)^(nt) + PMT × ((1+r/n)^(nt) - 1) / (r/n).
What is the Rule of 72?
Divide 72 by your annual return rate to estimate years to double your money. At 8% return: 72 ÷ 8 = 9 years to double. At 6%: 12 years. At 10%: 7.2 years.
What is the FIRE number?
Your FIRE number is annual expenses × 25 (the 4% rule). Spend $50,000/year? You need $1.25M to retire. Use the FIRE tab to calculate your exact number based on your spending and chosen withdrawal rate.
Why does starting early matter so much?
Starting 10 years earlier can roughly double your final balance. A 25-year-old investing $500/month at 8% for 40 years accumulates ~$1.75M. Starting at 35 for 30 years yields ~$745K — less than half, despite investing only 10 fewer years.
What is Coast FIRE?
Coast FIRE is the amount needed today so your investments grow to your FIRE number by retirement without additional contributions. Formula: Coast FIRE = FIRE Number ÷ (1+r)^years_to_retirement.
Is this calculator free?
Yes — no signup, no account, no limits. All 4 modes (Calculator, Scenarios, Retirement, FIRE) are completely free. Calculations happen in your browser — nothing is sent to any server.