Your Money Grows Faster Than You Think

Visualize the massive wealth that time can build.
With realistic data that accounts for inflation, we show you specifically when you can achieve financial freedom.

Starting Amount

$50K

Monthly Contribution

$1K

Quick Add

Annual Return

Investment Period

20 yrs

yrs

Current Age

Optional - Shows target age when entered

Adjust for Inflation

Applies 3% annual inflation rate

Projected Balance

$835.36K

Snowball Rolling ⚪

Estimated balance in 20 years: $835.36K

Target: 2046

Asset Growth Chart

Preview for your friends

In 20 Years$835.36K

My Wealth Projection in 20 Years 🔮

Total: $835.36K

Compound Interest Calculator Guide

What is Compound Interest?

Compound interest is the interest calculated not only on the initial principal but also on all the accumulated interest from previous periods. While simple interest only earns returns on your original investment, compound interest earns returns on your returns. For example, $10,000 invested at 8% simple interest earns $800 every year. But with compound interest, you earn $800 the first year, $864 the second year (8% of $10,800), and $933 the third year—growing exponentially. This accelerating growth is called the 'Snowball Effect'—like a small snowball rolling downhill, gathering more snow and momentum as it goes. Albert Einstein reportedly said, "Compound interest is the eighth wonder of the world. He who understands it, earns it; he who doesn't, pays it." Warren Buffett started investing as a teenager and has let compound interest work for over 80 years, turning modest savings into billions. Use this calculator to visualize your own wealth-building journey.

Simple vs Compound Interest ($10,000 at 8%)

Type	10 Years	20 Years	30 Years
Simple	$18,000	$26,000	$34,000
Compound	$21,589	$46,610	$100,627

After 30 years, compound interest earns ~3x more!

The Rule of 72

The Rule of 72 is a magical formula that lets you calculate 'When will my money double?' in just 3 seconds—no calculator needed. The method is simple: divide 72 by your expected annual return rate (%), and you get the number of years it takes to double your principal. For example, if your savings account offers 4% interest, it takes 72÷4=18 years to double your money. But if you invest in an ETF earning 8% annually, that's just 72÷8=9 years—cutting your wait time in half. Originally derived from complex logarithmic calculations, the number 72 was chosen because it has many divisors, making mental math easy for everyone. The true power of this rule is that it reveals the importance of return rates. It also works in reverse: divide 72 by the inflation rate (about 3%), and you'll see that in 24 years, your cash will lose half its purchasing power. The Rule of 72 transforms vague dreams of wealth into concrete numbers—your personal investment compass.

Years to Double = 72 ÷ Annual Return Rate (%)

Examples by Return Rate

3% (Savings Account): 72 ÷ 3 = 24 years → Bank deposit level
5% (Bonds/Dividend Stocks): 72 ÷ 5 = 14.4 years → Conservative investing
8% (Index ETFs): 72 ÷ 8 = 9 years → S&P 500 average level
10% (Growth Stocks): 72 ÷ 10 = 7.2 years → Long-term stock average
12% (Aggressive): 72 ÷ 12 = 6 years → Higher risk involved

Smart Investing Tips

Start Early: Compound interest grows exponentially over time. Someone who starts investing $300/month at age 25 could have over twice as much at retirement compared to someone who starts at 35. Don't wait for the 'perfect moment'—the best time to start is now, even with small amounts.
Practice Dollar-Cost Averaging (DCA): Invest a fixed amount regularly regardless of market conditions. This strategy removes the stress of timing the market. When prices are high, you buy fewer shares; when low, you buy more—automatically lowering your average cost per share over time.
Diversify with ETFs: Invest in broad market ETFs like S&P 500 (SPY, VOO) or Total World Stock (VT) to instantly own hundreds or thousands of companies. This gives you market-average returns without the need to research individual stocks—perfect for beginners and experts alike.
Don't Forget to Rebalance: Review your portfolio allocation annually. If stocks have grown significantly, shift some to bonds to lock in gains. If stocks have dropped, buy more at lower prices. Maintaining your target allocation helps manage risk while optimizing returns over time.

How to Use This Calculator

Starting Amount: Enter how much you can invest today. This could be savings from a matured CD, extra funds beyond your emergency fund, or even $0 if you're just starting out. The important thing is to begin.
Monthly Contribution: Set how much you'll consistently save each month. Aim for 10-20% of your income. Try the preset buttons above (Cut Coffee, Skip Delivery, etc.) to see how small lifestyle changes can compound into significant wealth over time.
Annual Return Rate: Enter your expected investment return. For reference, the S&P 500 has averaged about 10% annually over the past 50 years. Be conservative and use 7-8% for stock investments, or 3-4% if you're only using savings accounts.
Investment Period: Set your target timeframe and watch the growth curve on the chart. Toggle 'Adjust for Inflation' to apply a 3% annual inflation rate, showing your assets in real purchasing power rather than nominal value. This helps you understand what your money will actually be worth.

Frequently Asked Questions (FAQ)

: Simple interest is calculated only on the principal amount, whereas Compound Interest is 'interest on interest'. It is the core principle of the 'Snowball Effect', where your wealth grows exponentially over time. While the difference is small in the short term, the results can more than double over long-term investments of 10 years or more.
: The Rule of 72 is a mental math shortcut to estimate when your investment will double. Simply divide 72 by your annual rate of return. For example, with an 8% return, 72 ÷ 8 = 9 years to double your money. It's also useful for calculating when inflation will halve the value of your money.
: It depends on your risk tolerance, but historically, the S&P 500 index has an annualized return (CAGR) of about 8-10%. Conservative investors often target 5-7% (Bonds/Dividend stocks), while aggressive investors might aim for 10-12% (Growth stocks).
: $100,000 in 10 years is not worth the same as $100,000 today. If inflation is 3% annually, your purchasing power decreases. The 'When Rich' calculator adjusts for this to show the 'Real Purchasing Power' of your future money. This is how you calculate true financial freedom.
: This version simulates Pre-tax assets because tax rates vary by country and account type (e.g., 401(k), Roth IRA). In the US, you should generally consider Long-term Capital Gains Tax (typically 15-20%) when withdrawing funds from taxable accounts.
: Absolutely. In the magic of compounding, 'Time' is more important than the 'Amount'. Investing just $300/month for 30 years starting in your 20s can yield greater wealth than starting in your 50s with much more capital. Starting early is your most powerful weapon.
: The theory is that if you withdraw only 4% of your retirement savings annually, you will likely never run out of money. For example, if you need $40,000/year for living expenses, you need 25 times that amount, which is $1 million. Use this calculator to see when you'll hit that $1 million mark.
: Cars come with high costs beyond the purchase price, including insurance, fuel, and depreciation. If you invest $600/month (saved from car costs) into an S&P 500 ETF (8% return), the difference in 10 years is significant. Use the 'When Rich' presets to see the impact yourself.
: It means using the dividends you receive to buy more shares instead of spending the cash. This increases your share count, which leads to more dividends, creating a virtuous cycle that maximizes the compound effect.
: This simulator provides logical projections based on mathematical formulas. However, actual markets are volatile and do not guarantee constant returns every year. Use these results as a 'compass' for long-term financial planning, not a guarantee.

💰20 years · $835.36K

What is Compound Interest?

Simple vs Compound Interest ($10,000 at 8%)

Type	10 Years	20 Years	30 Years
Simple	$18,000	$26,000	$34,000
Compound	$21,589	$46,610	$100,627

After 30 years, compound interest earns ~3x more!

The Rule of 72

Years to Double = 72 ÷ Annual Return Rate (%)

Examples by Return Rate

3% (Savings Account): 72 ÷ 3 = 24 years → Bank deposit level

5% (Bonds/Dividend Stocks): 72 ÷ 5 = 14.4 years → Conservative investing

8% (Index ETFs): 72 ÷ 8 = 9 years → S&P 500 average level

10% (Growth Stocks): 72 ÷ 10 = 7.2 years → Long-term stock average

12% (Aggressive): 72 ÷ 12 = 6 years → Higher risk involved

Smart Investing Tips

Start Early: Compound interest grows exponentially over time. Someone who starts investing $300/month at age 25 could have over twice as much at retirement compared to someone who starts at 35. Don't wait for the 'perfect moment'—the best time to start is now, even with small amounts.

Practice Dollar-Cost Averaging (DCA): Invest a fixed amount regularly regardless of market conditions. This strategy removes the stress of timing the market. When prices are high, you buy fewer shares; when low, you buy more—automatically lowering your average cost per share over time.

Diversify with ETFs: Invest in broad market ETFs like S&P 500 (SPY, VOO) or Total World Stock (VT) to instantly own hundreds or thousands of companies. This gives you market-average returns without the need to research individual stocks—perfect for beginners and experts alike.

Don't Forget to Rebalance: Review your portfolio allocation annually. If stocks have grown significantly, shift some to bonds to lock in gains. If stocks have dropped, buy more at lower prices. Maintaining your target allocation helps manage risk while optimizing returns over time.

How to Use This Calculator

Starting Amount: Enter how much you can invest today. This could be savings from a matured CD, extra funds beyond your emergency fund, or even $0 if you're just starting out. The important thing is to begin.

Monthly Contribution: Set how much you'll consistently save each month. Aim for 10-20% of your income. Try the preset buttons above (Cut Coffee, Skip Delivery, etc.) to see how small lifestyle changes can compound into significant wealth over time.

Annual Return Rate: Enter your expected investment return. For reference, the S&P 500 has averaged about 10% annually over the past 50 years. Be conservative and use 7-8% for stock investments, or 3-4% if you're only using savings accounts.

Investment Period: Set your target timeframe and watch the growth curve on the chart. Toggle 'Adjust for Inflation' to apply a 3% annual inflation rate, showing your assets in real purchasing power rather than nominal value. This helps you understand what your money will actually be worth.

Frequently Asked Questions (FAQ)

Simple interest is calculated only on the principal amount, whereas Compound Interest is 'interest on interest'. It is the core principle of the 'Snowball Effect', where your wealth grows exponentially over time. While the difference is small in the short term, the results can more than double over long-term investments of 10 years or more.

The Rule of 72 is a mental math shortcut to estimate when your investment will double. Simply divide 72 by your annual rate of return. For example, with an 8% return, 72 ÷ 8 = 9 years to double your money. It's also useful for calculating when inflation will halve the value of your money.

It depends on your risk tolerance, but historically, the S&P 500 index has an annualized return (CAGR) of about 8-10%. Conservative investors often target 5-7% (Bonds/Dividend stocks), while aggressive investors might aim for 10-12% (Growth stocks).

$100,000 in 10 years is not worth the same as $100,000 today. If inflation is 3% annually, your purchasing power decreases. The 'When Rich' calculator adjusts for this to show the 'Real Purchasing Power' of your future money. This is how you calculate true financial freedom.

This version simulates Pre-tax assets because tax rates vary by country and account type (e.g., 401(k), Roth IRA). In the US, you should generally consider Long-term Capital Gains Tax (typically 15-20%) when withdrawing funds from taxable accounts.

Absolutely. In the magic of compounding, 'Time' is more important than the 'Amount'. Investing just $300/month for 30 years starting in your 20s can yield greater wealth than starting in your 50s with much more capital. Starting early is your most powerful weapon.

The theory is that if you withdraw only 4% of your retirement savings annually, you will likely never run out of money. For example, if you need $40,000/year for living expenses, you need 25 times that amount, which is $1 million. Use this calculator to see when you'll hit that $1 million mark.

Cars come with high costs beyond the purchase price, including insurance, fuel, and depreciation. If you invest $600/month (saved from car costs) into an S&P 500 ETF (8% return), the difference in 10 years is significant. Use the 'When Rich' presets to see the impact yourself.

It means using the dividends you receive to buy more shares instead of spending the cash. This increases your share count, which leads to more dividends, creating a virtuous cycle that maximizes the compound effect.

This simulator provides logical projections based on mathematical formulas. However, actual markets are volatile and do not guarantee constant returns every year. Use these results as a 'compass' for long-term financial planning, not a guarantee.

Your Money Grows Faster Than You Think

Projected Balance

Asset Growth Chart

What is Compound Interest?

The Rule of 72

Smart Investing Tips

How to Use This Calculator

Frequently Asked Questions (FAQ)

What is the difference between Simple and Compound Interest?

What is the Rule of 72?

What is a realistic target rate of return?

Why is setting the Inflation Rate important?

Does this calculator include Taxes?

Can I become rich with small starting capital?

What is the '4% Rule' for FIRE?

Is it better not to buy a car (TCO perspective)?

What is Dividend Reinvestment?

How accurate are these results?

Projected Balance

Asset Growth Chart

What is Compound Interest?

The Rule of 72

Smart Investing Tips

How to Use This Calculator

Frequently Asked Questions (FAQ)

What is the difference between Simple and Compound Interest?

What is the Rule of 72?

What is a realistic target rate of return?

Why is setting the Inflation Rate important?

Does this calculator include Taxes?

Can I become rich with small starting capital?

What is the '4% Rule' for FIRE?

Is it better not to buy a car (TCO perspective)?

What is Dividend Reinvestment?

How accurate are these results?