What is the Rule of 72?

Divide 72 by your interest rate to estimate years to double your money. At 8% it takes about 9 years (72/8=9).

Compound Interest Calculator

Q: How often should interest compound?

More frequent compounding means slightly more growth. Monthly is common for savings. Stocks compound based on actual returns.

See how your investments grow over time with the power of compounding.

Initial Investment ($)

Annual Interest Rate (%)

Years

Monthly Contribution ($)

Compound Frequency

The Power of Compound Interest

Compound interest is interest earned on both your original investment and on previously earned interest. Over time, this creates exponential growth.

FV = P(1 + r/n)^(nt) + PMT × [((1 + r/n)^(nt) − 1) / (r/n)]

Rule of 72: Divide 72 by your interest rate to estimate how many years it takes to double your money. At 8%, it takes ~9 years.

Starting Early: $10K invested at age 25 at 8% grows to $217K by 65. Start at 35? Only $100K.

Consistent Contributions: Adding $500/month can turn a modest investment into millions over decades.

Frequently Asked Questions

What is the average stock market return?

The S&P 500 has historically returned about 10% annually before inflation, or about 7% after inflation. This is a common benchmark for long-term projections.

How often should interest compound?

More frequent compounding = slightly more growth. Monthly is common for savings accounts. Stocks compound based on their actual returns.

Is this calculator accurate for stocks?

This gives a simplified projection assuming a constant return rate. Real stock returns vary year to year. Use it for planning, not guarantees.

⚠️ Disclaimer: This calculator is for educational and informational purposes only. It does not constitute financial advice. Always consult a qualified financial advisor before making investment decisions.

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