Watch savings snowball: starting amount, monthly contributions and your rate — charted year by year so you can see the compounding.
| Year | Contributed | Interest | Balance |
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Compare 10 vs 30 years and watch interest overtake contributions — the strongest argument for starting now.
Estimate what a high-yield account or CD actually pays over its term at daily or monthly compounding.
"Double your money in 5 years" implies ~15% a year — type it in and see how unrealistic that usually is.
Compound interest earns interest on previously earned interest, and how often that is credited changes the result. Ten percent compounded annually turns 1,000 into 1,100 after a year; compounded monthly it gives 1,104.71, and daily 1,105.16.
The gains from more frequent compounding diminish quickly, converging on a limit — continuous compounding at 10 percent yields 1,105.17, barely above daily. Beyond monthly, the difference is negligible for practical purposes, which is why arguments about daily versus continuous compounding matter far less than the rate itself.
The figure that makes products comparable is the effective annual rate, which expresses what a nominal rate with a given compounding frequency actually returns over a year. Comparing a nominal 10 percent compounded monthly against a nominal 10.3 percent compounded annually requires converting both to an effective rate first — otherwise you are comparing different things.
The variable with the greatest influence is the number of years, because growth is exponential rather than linear. Someone investing 200 a month from age 25 to 35 and then stopping typically ends with more at 65 than someone starting at 35 and contributing for thirty years — despite contributing a third as much. The early money simply has longer to compound.
The rule of 72 gives a quick estimate: divide 72 by the annual percentage rate to find the approximate doubling time. At 6 percent, money doubles in about 12 years; at 9 percent, about 8. It is accurate enough for mental arithmetic in the range of rates most people encounter.
The same mathematics works against you on debt. A credit card at 20 percent compounding monthly doubles a balance in under four years if nothing is paid, which is why minimum payments extend a balance almost indefinitely — the interest consumes most of each payment.
Any projection assuming a constant rate is an illustration, not a forecast. Real investment returns vary year to year, and the order in which returns arrive matters — a large loss early in a withdrawal phase is far more damaging than the same loss later, a risk known as sequence-of-returns risk that a smooth projection cannot show.
Three deductions reduce the outcome and are frequently omitted. Inflation erodes purchasing power, so a nominal return of 7 percent with 3 percent inflation is about 4 percent in real terms — projecting in real terms is more honest. Fees compound too: a 1 percent annual charge can consume a substantial share of a portfolio over decades. Tax on gains, dividends or interest depends on the account type and jurisdiction.
This calculator applies the assumptions you enter and nothing else. It is not financial advice and does not model market volatility, fees, tax or inflation unless you build them into the rate. Past returns do not predict future ones, and for decisions involving retirement or significant sums, a qualified regulated adviser is the appropriate source.
No — results are nominal, pre-tax. A common approach: subtract expected inflation (~2-3%) from your rate to estimate real purchasing power.
Long-run broad-market averages are often quoted around 7% after inflation, but past performance guarantees nothing — try a range (5%, 7%, 9%) and plan with the lower bound.
At the end of each month, which is the conservative convention. Real-world differences from contributing at the start of the month are small.
Very little. At 10 percent, monthly compounding on 1,000 gives 1,104.71 after a year and daily gives 1,105.16 — the limit under continuous compounding is 1,105.17. The rate and the time period matter far more.
Divide 72 by the annual rate to estimate doubling time. At 6 percent, roughly 12 years. It works both ways — a 20 percent credit card balance doubles in under four years.