See how your investment grows with compound interest and compare it to the real historical S&P 500 return.
Use a negative number to model withdrawals.
Long-run U.S. average: ~2.5% · Fed target: 2%
Average annual return (CAGR) for this period: 10.62%
Estimated future value
$254,223
Effective annual return: 8.00%
Equivalent in today's purchasing power: $140,349 (after 2.00% inflation)
Did you know?
At this pace, you could reach financial independence sooner than you think
Carry this same balance into the FIRE calculator and see what year you could retire.
Total contributed
$59,000
Total gain
$195,223
Annual return
8.00%
Estimate calculated from the numbers you entered. This is not financial, tax, or legal advice — always consult a qualified professional before making significant financial decisions.
Same years, rate, and frequency — only the starting balance changes.
Starting balance
$1,000
Grows to
$213,972
Starting balance
$5,000
Grows to
$254,223
Your selectionStarting balance
$10,000
Grows to
$304,536
Starting balance
$50,000
Grows to
$707,043
Try different values and click «Save this scenario» to compare them here, side by side.
What happens to your money if you hold it in cash versus investing it, both measured in today's dollars.
Inflation loss (uninvested)
$26,428
Cash you hold onto loses real value every year.
Real gain from investing
$107,777
Advantage of investing over holding cash, in purchasing power.
Real annual return
6.00%
Investment return rate minus inflation.
Bars show the value in today's dollars. Cash held uninvested loses purchasing power to inflation; invested money grows above it.
Compound interest is what happens when the interest your money earns gets reinvested and starts earning interest of its own. Unlike simple interest, gains stack on top of previous gains here, which is what produces exponential growth over time.
If you invest a lump sum and just let it grow, the future value follows the classic compound interest formula:
FV = P₀ × (1 + r / n)n × tIf you also add a fixed amount every period (say, every month), the future value of that stream of contributions gets added in as well, calculated as an annuity:
FV = P₀ × (1 + i)N + PMT × [ ((1 + i)N− 1) / i ]The higher the compounding frequency (n), the higher your effective return. That's why a 10% nominal rate compounded monthly works out to a 10.47% effective annual rate. This calculator simulates growth period by period to capture that precisely.
Figures calculated at an 8% annual return (a conservative long-run average for the S&P 500 with dividends reinvested), compounding over time.
A 30-year-old contributing $300 a month until age 65.
Estimated final balance
~$688,000
Contributed $126,000 · Gain ~$562,000
Starting at 30 and sticking with it for 35 years turns $126,000 in contributions into nearly $700,000.
Parents contributing $100 a month from birth through age 18.
Estimated final balance
~$48,000
Contributed $21,600 · Gain ~$26,400
A modest monthly contribution from birth more than doubles by the time college rolls around.
A one-time $10,000 investment with no further contributions, over 30 years.
Estimated final balance
~$100,600
Contributed $10,000 · Gain ~$90,600
Without adding another dollar, the balance grows 10x thanks to compounding's snowball effect.
Comparing $200/month in contributions until age 65.
Starting at 25
40 years
~$671,000
Starting at 35
30 years
~$298,000
Starting at 45
20 years
~$118,000
Waiting 10 extra years to start can cut your final balance by more than half. Time is your most valuable asset.
Answers to the most common questions about compound interest and how to use this calculator.
It's interest calculated not just on your original balance, but on the interest that balance has already earned. Because those earnings get reinvested, your money grows exponentially instead of in a straight line.
Simple interest is always calculated on the original balance, so it grows at a constant rate. Compound interest reinvests the interest itself, so each period earns a return on a bigger base than the one before.
It depends on what you're invested in. As a reference point, the S&P 500 has historically returned roughly 7-10% a year on average (with dividends reinvested, adjusted across different periods), but past performance is no guarantee of future results. Use the built-in historical range to pull a realistic rate for your own time horizon.
The more frequent and consistent your contributions, the more you benefit from compounding and the more you smooth out market volatility through dollar-cost averaging. The calculator lets you model daily, monthly, or yearly contributions.
Not by default. The main results are gross, nominal figures. Turn on the inflation field to see your future value in today's purchasing power — but capital gains taxes aren't factored in, since they depend on your account type (taxable, 401(k), IRA) and tax bracket.
No. This tool is for educational and informational purposes only. It is not financial, tax, or investment advice. Always talk to a qualified professional before making investment decisions.
No. Every calculation runs locally in your own browser. We don't send or store the figures you enter anywhere on our servers.
CAGR stands for Compound Annual Growth Rate. It's the smoothed, constant annual rate of return an investment would need to grow from its starting balance to its ending balance, assuming gains are reinvested every year. It's the standard way to express a volatile, real-world return as a single steady number.
The historical data gives a useful approximation of how the U.S. stock market has actually performed (with dividends reinvested), but the golden rule still applies: past returns don't guarantee future results. Treat it as an educational estimate, not a promise of future gains.
Yes — this calculator works well for modeling the long-term growth of a 401(k), IRA, or index fund portfolio. Just enter your current balance, the monthly or annual contribution you plan to make, the years left until retirement, and a realistic expected return (many planners use 5-7% after inflation).
It controls how often earned interest gets added back to your principal. Daily compounding produces a slightly higher final balance than annual compounding at the same nominal rate. For long-term stock market investing, "Annually" is the cleanest, most realistic estimate. For savings accounts and CDs, "Monthly" is common.
Markets don't move in a straight line. Setting a variance of, say, 2% shows you what happens if your average return comes in 2 points lower (pessimistic) or higher (optimistic) than expected. It's a quick way to build in a margin of safety and mentally prepare for the plan not going exactly as modeled.
If you contribute at the start of the month (or year), that money spends more time in the market earning interest during that period. That's why choosing "Start of period" always produces a slightly higher final balance than "End of period." Over decades, that small edge adds up.
Specific levers, and roughly what each one is worth. Not “save more” — the things that change the figure above by an amount you can measure.
Move the start date before you move the amount
Ten years of head start beats three times the contributions. $300/month from 25 to 35 and then nothing reaches roughly $358,000 by 65 at 7%; $300/month from 35 to 65 — three times the money — reaches about $340,000. If you are choosing between starting small now and starting properly next year, start small now.
Watch the expense ratio, not just the return
A fund charging 0.60% instead of 0.05% costs you 0.55 points a year, compounding. On $200,000 over 25 years at 7%, that gap is roughly $130,000 of ending balance. It is the one input in the whole model you control with certainty.
Turn on the inflation field before you trust the headline
A projection showing $1,000,000 in 30 years describes dollars that buy about $412,000 of today's goods at 3% inflation. Plan against the inflation-adjusted figure; use the nominal one only when comparing against a nominal target.
Find your crossover point
Your portfolio starts earning more per year than you contribute once the balance times your return exceeds your annual contribution — at 7% and $6,000/year, around $86,000. Before that, your savings rate is the engine. After it, the market is. Getting there early is what "start young" actually buys.
Every calculator simplifies, and the useful thing is knowing exactly where. These are the specific gaps between this estimate and your real situation:
For anything that turns on an exact figure, use the primary sources below or a qualified professional. How these limits are decided and disclosed is described in the editorial standards.
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