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Compound growth is calculated as A equals P multiplied by (1 + r/n) raised to the power of nt. P is the starting amount, r is the annual return, n is the number of compounding periods each year and t is the number of years. At 7% annual growth, $10,000 becomes about $19,672 after ten years and $38,697 after twenty. The free StockEducation Compound Interest Calculator also includes regular contributions and separates your deposits from estimated growth each year. It leaves out taxes, fees and uneven market returns, so the result is an illustration rather than a forecast.
Fill in the assumptions below. The calculator updates the projection, chart and year-by-year table.
General education only — check the assumptions before using the result.
Purpose: This calculator is a general educational tool that performs a numerical calculation from the values you enter. It does not recommend, advertise or promote a specific financial product.
Assumptions: The calculation uses the input values and assumptions displayed in the calculator. Default values are illustrative starting points, not forecasts. Change each non-statutory assumption so it matches the scenario you want to test.
Limitations: Actual market returns, prices, dividends, interest rates, fees, tax, inflation and timing may differ from the assumptions. The calculator may omit factors relevant to you. Small input changes can materially change the result, so the output is an illustration rather than a prediction.
This financial calculator is not intended to be relied on for the purposes of making a decision in relation to a financial product. You should consider obtaining advice from a financial services licensee before making any financial decisions.
You can print this page or save it electronically using your browser controls. See ASIC Instrument 2026/41 for the conditions applying to generic financial calculators.
Disclaimer · Terms of Use
Educational projection only. Results assume a constant return and do not include taxes, fees, inflation or market volatility.
$10,000 invested at 7% annual interest with $200 added monthly grows to roughly $137,000 after 20 years using yearly compounding. Compound interest is interest earned on both your original deposit and the interest already added to it. The longer the time horizon, the more the balance grows from interest on interest rather than from the original deposit.
Project growth from starting balance, rate and contributions in three steps.
Use what you actually have, not what you wish you had. Pick a defensible return rate (most beginners use 5% to 7% real for diversified equity).
Years to grow is the most important input after rate. Add a realistic monthly or yearly contribution you can sustain through downturns.
The result shows Projected Value, a Balance Growth Over Time chart, a Projection Summary, and a full Annual Breakdown table. The headline number is one data point — the year-by-year table is where the lesson is: most growth happens in the last 5 to 10 years, which is the case for staying invested through the early flat period.
A four-stage written walkthrough — the chapters a video would cover, available now in text.
Four chapters covering inputs, outputs and the common mistakes to avoid.
4 min watch. Auto captions available. Walkthrough chapters listed above.
Specific outcomes, not generic claims.
Compare starting at 25 versus 35 with the same monthly contribution. The 10 year head start usually more than doubles the final balance.
Test the same plan at 5%, 7% and 9% to see how sensitive your projection is to small rate changes. Stress test before you commit.
Get a clear projection, growth chart and year by year breakdown in seconds. No formula errors, no manual rebuilds when assumptions change.
Most calculators hide the formula. We show it because understanding the math is the point.
The standard compound interest formula, written out with plain English variable names.
FV
P
r
n
t
PMT
The projection is a mathematical model, not a forecast. Six assumptions baked into the math, plus what real outcomes look like.
Each card pairs an assumption the calculator makes with what real world investing actually looks like.
Reality: S&P 500 annual returns ranged from roughly negative 37% to positive 37% between 1928 and 2024[1]. The average year is rare.
Reality: A 1% annual fee compounds to roughly 18 to 19% lower balance over 30 years[2]. Fees compound too.
Reality: Capital gains tax applies on disposals. Australia gives individuals a 50% CGT discount after 12 months[3].
Reality: The projection is in nominal dollars. Real growth has historically been roughly 3 points slower per year[4].
Reality: Most investors miss contributions during downturns, which is exactly when continuing matters most.
Reality: Life happens. Emergencies, house deposits, kids. The smooth curve assumes you never take money out.
Same base scenario, one variable changed at a time. The projection is highly sensitive to small changes.
The calculator assumes a smooth return every year. Here is how that compares to verified historical data.
Written by Dr. Charles Lo, Associate Professor, CPA. Reviewed annually.
Compound interest is what happens when investment returns are reinvested, so future returns are earned on those returns as well as on the original amount. The longer the timeframe, the more growth comes from interest on interest rather than from the original deposit. This is the single most important concept in long term investing.
The mechanism is the formula shown above. A $10,000 investment earning 7% per year becomes $10,700 after one year. In year two you earn 7% on $10,700, gaining $749 instead of $700. The difference looks small in year two. Over 30 years it dominates the entire return.
Compound growth is not linear. A $10,000 lump sum at 7% becomes roughly $19,700 after 10 years, $38,700 after 20 years, and $76,100 after 30 years. Time, not rate, is the dominant variable, which is why every investing textbook begins with the cost of waiting one, two or five years before starting.
Long run S&P 500 returns have averaged roughly 10.2% nominal and 7.0% real since 1928. For planning, 5 to 7% real is conservative, 8 to 10% nominal is optimistic but defensible, and above 10% nominal needs a strong reason.
For bonds and cash, expect 1 to 3% real. For balanced portfolios, 4 to 6% real. Use the lower end if you want a margin of safety.
Look at three numbers. The final balance is the projected ending value. The total contributions show how much is your own money. The total interest shows what compounding added on top. If interest is a small share of the final balance, you need more time, a higher rate, or larger contributions.
A useful rule of thumb is the rule of 72. Divide 72 by your annual return to estimate how many years it takes the balance to double. At 7%, a balance doubles roughly every 10 years. At 10%, every 7 years.
Real numbers calculated from the same formula as the live tool. Every figure below is verified, not approximated.
Two illustrative investors. $10,000 start, $500 monthly, 7% real, monthly compounding
Investor A starts at 25 and invests for 40 years until 65. Investor B does the same plan but starts at 35 and invests for 30 years. The 10 year head start is the entire difference.
$50,000 start, $500 monthly, 6% annual, 15 years, monthly compounding
A 40 year old plans steady contributions through to age 55 on a balanced portfolio return.
$100,000 start, $1,000 monthly, 5% annual, 25 years, yearly compounding
A pre retiree runs a deliberately conservative projection to stress test current contributions.
$5,000 start, $100 monthly, 7% real, 20 years, yearly compounding
A reader in their late 20s checks what consistent small contributions do over two decades.
$10,000 start, $400 monthly, 7% annual, 30 years, yearly compounding
Take the base scenario ($10,000, $200 monthly, 7%, 20 years = $137,086) and double both contribution and time. The rule of 72 says money doubles every 10 years at 7%, so extra time roughly doubles the balance and doubled contributions roughly double it again.
The questions users most often ask about calculator output.
Yes. The calculator is free to use, no signup or account required. It runs in your browser. Your inputs are not stored or shared.
The math is exact for the formula shown above. What is not accurate is the projection itself, because real returns are not constant. See the assumptions card above for a full list of what the calculator does and does not model.
For long term equity, 7% real or 10% nominal are defensible based on S&P 500 history since 1928. For conservative planning use 5 to 6% real. For bonds or cash, 1 to 3% real. Avoid above 10% nominal without strong justification.
Not by default. The projection is in nominal dollars. To plan in real terms (purchasing power), enter a real return rate. Modelling a 7% return with 3% inflation as a 4% real return shows the balance in today’s dollars.
No. The projection is gross. A 1% annual fee compounds to roughly 18 to 19% lower balance over 30 years. Capital gains and dividend tax further reduce real outcomes outside tax sheltered accounts.
Simple interest is calculated only on the original principal each period. Compound interest is calculated on the principal plus all interest already earned. Over long periods, compounding produces a much larger final balance for the same interest rate.
It matters but less than people think once you are compounding at least once a year. Moving from yearly to monthly compounding on a 7% return raises the effective annual yield by only a fraction of a percent. The bigger drivers of growth are time, rate and contribution size.
Compound interest is not linear. Over 30 plus years even modest contributions grow to large balances under constant rate assumptions. The number is not wrong, but real outcomes will be lower due to volatility, fees, tax, and missed contributions during downturns.
Other tools for different parts of your financial picture.
The calculator uses the standard compound interest formula with regular contributions. Historical S&P 500 return data referenced from publicly available primary aggregators of US equity returns since 1928. Australian tax and investing context references ASIC MoneySmart and the ATO.
This calculator is provided for general educational purposes only. It does not constitute financial product advice and does not take into account your personal objectives, financial situation or needs. Past performance and assumed return rates are not a reliable indicator of future results. Tax rules vary by jurisdiction and personal circumstances. Consider whether any general information is appropriate for you and seek independent licensed advice before making any investment decision.
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