What's the rule of 72?

An approximation: at a given annual rate, your money doubles in about 72 ÷ rate years. At 6%, that's ~12 years. At 8%, ~9. The calculator gives the exact figure; the rule is a useful mental check.

Why does monthly compounding produce more than annual?

Because each month's interest immediately starts earning its own interest in the next month. Annual compounding waits 11 months longer to start earning on that interest. The difference is tiny at 5%, meaningful at 15%.

Are taxes considered?

No. The result is a pre-tax future value. In tax-advantaged accounts (401k, IRA, ISA) the calculator's number is close to your final balance. In a taxable account, expect ~70-85% of the figure after long-term capital gains tax.

What rate should I use for stocks?

The S&P 500's long-term real return (after inflation) is approximately 6-7%. Nominal returns are higher but worth less in future dollars. 7% nominal is the common conservative planning assumption.

Does the calculator account for inflation?

No, the result is in nominal dollars. Subtract about 2-3% from your rate to get a real-dollar estimate.

Compound Interest Calculator

Starting amount, periodic contribution, rate, time — and the final balance broken into contributions vs interest.

Compound interest is the most powerful force in personal finance: contributions made early grow on top of all the interest they earned in earlier periods. The calculator below lets you change four numbers — starting amount, contribution per period, annual rate, and time horizon — plus pick the compounding frequency. The result splits final balance into what you put in vs. what the interest earned for you.

Starting amount ($)

Contribution per period ($)

Annual rate (%)

Years

Compounding frequency

Final balance

$300,850.72

Total contributions

$130,000.00

Total interest earned

$170,850.72

Contributions are assumed to land at the end of each compounding period (standard textbook convention).

How to use

Enter your starting amount
The lump sum you're starting with. Use 0 if you're starting from scratch.
Enter a contribution
Per-period addition — if you're adding $500/month and compounding monthly, that's $500 per period.
Enter rate, years, and frequency
Annual rate as a percent (e.g., 7 for 7%). Years is the time horizon. Frequency is how often interest compounds — monthly is typical for savings/investment accounts.

Time + rate = magic

Start	Monthly add	Rate	Years	Final balance
$0	$500	7%	30	~$609K
$10K	$500	7%	30	~$691K
$0	$1000	7%	20	~$521K
$0	$1000	4%	20	~$367K

Frequently asked questions

What's the rule of 72?: An approximation: at a given annual rate, your money doubles in about 72 ÷ rate years. At 6%, that's ~12 years. At 8%, ~9. The calculator gives the exact figure; the rule is a useful mental check.
Why does monthly compounding produce more than annual?: Because each month's interest immediately starts earning its own interest in the next month. Annual compounding waits 11 months longer to start earning on that interest. The difference is tiny at 5%, meaningful at 15%.
Are taxes considered?: No. The result is a pre-tax future value. In tax-advantaged accounts (401k, IRA, ISA) the calculator's number is close to your final balance. In a taxable account, expect ~70-85% of the figure after long-term capital gains tax.
What rate should I use for stocks?: The S&P 500's long-term real return (after inflation) is approximately 6-7%. Nominal returns are higher but worth less in future dollars. 7% nominal is the common conservative planning assumption.
Does the calculator account for inflation?: No, the result is in nominal dollars. Subtract about 2-3% from your rate to get a real-dollar estimate.

About

Why compounding frequency matters

Continuously-compounded interest is the upper bound (FV = P·eʳᵗ). Discrete frequencies approach it as the period shrinks. The gap between monthly and daily is < 0.05% over a year — but the gap between annual and monthly is meaningful for high rates over long horizons.

What this isn't

A retirement planner. It assumes a fixed rate, no withdrawals, no tax events, and a constant contribution. Real returns are noisy. Use this for back-of-envelope, not for asset-allocation decisions.