Compound Interest Calculator for Traders
See how a starting amount and regular deposits grow when gains are reinvested, compared with real market benchmarks.
Your plan
Stock market long-run average: about 7–10% before inflation.
Tap one to use it. Stocks use their long-run averages or their 2016–2025 pace; T-bills and bonds show 2016–2025, when rates sat near zero for years, so today’s yields are higher. Past averages, not forecasts.
About the comparisons
Pick comparisons above the chart (stocks, bonds, savings, gold, inflation or your own rate) to see how the same deposits would do elsewhere.
In 20 years you'd have
$130,000 you put in + $215,742 of growth
In plain EnglishOf your projected $345,742, you put in $130,000 (38%). The other $215,742 (62%) comes from modeled investment growth. Growth builds late: in year 20 your money earns $26,283, against $1,096 in year 1.
8% compounded monthly grows 8.30% in a real year (the effective yearly rate). At that pace money doubles about every 8.7 years (the Rule of 72 says 8.7).
$30,000 is deposits you'd skip; $108,500 is growth lost to time.
Reached in 31 years 10 months
That's after your 20-year horizon.
In 20 years $1,000,000 would buy what $553,676 buys today (at 3% inflation).
How your money grows
Grey is what you deposited; green is growth on top.
Deposits are made at the start of each month. Comparison lines use the same deposits.
What would it take to reach $1,000,000?
Four ways to get there. Each one changes only that number and leaves everything else as you set it above.
The goal is in future dollars. Whole dollars, rounded up so each answer reaches the goal. A required return is a yearly figure compounded the way you set it above.
How long will the money last?
Saving is half the story. Once you start taking money out, the balance keeps earning while it shrinks. See how long it lasts, and the most you could take each month.
The first month. Taken at the start of each month.
The money lasts the full 30 years
You would still have $762,909 at the end (future dollars).
Hypothetical: the money earns a steady 8% a year, compounded monthly, and the withdrawals come out at the start of each month. Real returns are uneven, and a bad market early in retirement does far more damage than the same average spread evenly. The 4% rule of thumb comes from past US market data and is not a guarantee. Taxes on the withdrawals are not included (see the tax view). For education, not advice.
Compare up to three plans
Set up a plan above, save it, change something (the return, the deposit, the years) and save it again. Each plan keeps the numbers it was saved with.
The last button fills all three with your current plan at a steady 4%, 7% and 10% a year. Those are made-up rates to show how much the return matters, not predictions.
What if the market crashes?
Pick two moments for the same crash. It can land early, when you have little invested, or late, when you have a lot. See how much the timing changes where you end up.
The later crash (year 18) costs $74,738 more in dollars than the earlier one (year 3). It hit when your balance was bigger, so there was more to lose and less time to rebuild. The earlier crash hit a smaller balance, and the deposits you made afterwards bought in at lower prices.
Hypothetical: in the crash year the market falls 30% over the twelve months; every other year earns your 8%, with no extra rebound afterwards. Deposits keep going all the way through, and compounding is monthly. Real crashes and recoveries look different, so this shows the effect of timing, not a forecast.
What taxes do to the same plan
Before taxes your plan ends at $345,742. Here is what you would keep in each kind of US account.
Tax-free growth. You pay income tax before the money goes in, and nothing when you take it out.
No tax on the way out
Tax-deferred. Deposits skip income tax today, and the whole balance is taxed as income when you withdraw it.
Taxes take $76,063 by the end: 22% income tax on the withdrawal.
Taxed along the way. Dividends are taxed every year, and the gain is taxed when you sell.
Taxes take $36,117 by the end: $5,943 paid on dividends along the way and $25,755 on the gain at the end, plus the growth that dividend tax money would have earned.
This only shows the tax at the end, so do not use it alone to pick between a Roth and a traditional account: Roth deposits are made with money that was already taxed, traditional deposits are not.
US federal rates only, set by you. Not included: state taxes, deposit limits and income limits for retirement accounts, early-withdrawal penalties, employer matches, and tax rules that change. For education, not tax advice.
Sources and method
How the projection is calculated
- It runs month by month: each month your deposit goes in, the money earns its interest, and the interest is added at the compounding date you pick (daily, weekly, monthly, quarterly, yearly or continuous).
- Deposits at the start of the month earn that month’s interest; deposits at the end start earning the next month. A deposit made partway through a compounding period only earns interest for the months it was invested.
- Yearly fees come out of the return (an 8% return with a 0.5% fee grows at 7.5%). Inflation never changes the balance; it only changes the “today’s dollars” figures.
- The math is checked against textbook formulas (lump sums, annuities, fees, goals and taxes) by an automated test suite, with no rounding along the way.
- Daily, weekly and continuous compounding are worked out as the exact growth per month of that frequency, which is precise because deposits only ever land on month boundaries. Weekly and 2-week deposits are treated as an even flow through the month; a yearly deposit lands once a year.
- The withdrawal section takes the money out at the start of each month, then lets the rest earn that month’s growth at a steady rate. The “most you could take” answer is exact, the same way: the ending balance falls in a straight line as the withdrawal rises.
- What it would take to reach a goal (deposit, starting amount, return, time) solves for one number at a time with everything else unchanged. The return is found by narrowing in on it, because more return always means more money.
- The “how much per month” answer is exact, not a guess: the ending balance rises in a straight line with the deposit, so two runs of the same engine pin down the number.
Comparison lines and the 2016–2025 replay
- Real monthly returns, January 2016 to December 2025 (120 months), downloaded October 23, 2026. Each fund’s return is the change in its dividend- and split-adjusted price from one month’s last trading day to the next, so dividends are reinvested and the fund’s own fees are already inside the number (they are not taken out twice). Source: Yahoo Finance.
- Inflation uses the US Consumer Price Index for All Urban Consumers (CPI-U, not seasonally adjusted) from the St. Louis Fed’s FRED database, month over month.
- 60/40 is 60% S&P 500 and 40% bonds, rebalanced every month.
- In Projection mode, the S&P 500 line grows at 10.5% a year and global stocks at 7.5%, commonly cited long-run averages used as assumptions. Every other line grows at its own 2016–2025 pace, shown below. Inflation uses your setting and the custom line uses your rate.
- The “likely range” band re-draws 400 possible paths by shuffling the S&P 500’s actual monthly changes around your average return, and shows the 10th to 90th percentile. It uses a fixed seed, so the same inputs always give the same band.
| Line | Data | Pace 2016–2025 |
|---|---|---|
| S&P 500 | SPY | 14.7% a year |
| Nasdaq 100 | QQQ | 19.4% a year |
| Global stocks | VT | 11.8% a year |
| Small companies (Russell 2000) | IWM | 9.5% a year |
| Dividend stocks | SCHD | 11.5% a year |
| US bonds | AGG | 2.0% a year |
| T-bills / savings | BIL | 2.0% a year |
| Gold | GLD | 14.6% a year |
| US inflation (CPI-U) | CPI-U | 3.2% a year |
Read this before trusting any number
- The past is not a forecast. 2016–2025 was an unusually strong decade for US stocks, which is why the S&P 500’s pace above is higher than the 10.5% used for projections.
- A steady yearly return never happens in real life. The likely-range band and the crash view show how bumpy the road can be.
- Not included unless you turn them on: taxes (see the tax view), trading costs, advisor fees beyond what you enter, and the gap between an index and what you could actually buy.
- For education only. Not investment, tax or legal advice.
How compound interest works
Compound interest is interest earned on your original money and on the interest it has already earned. With simple interest only the original amount earns. With compounding, each period starts from a bigger balance, so the same rate adds more money every year. This is why time matters more than almost anything else: the later years do most of the growth.
The formula
For one deposit that is left alone:
A = P × (1 + r/n)^(n × t)
A is the final amount, P the starting amount, r the yearly rate as a decimal (7% = 0.07), n how many times a year interest compounds and t the number of years.
A worked example
Put $10,000 in at a steady 7% a year, compounded yearly, and add nothing. After 10 years it is $19,672, after 20 years $38,697 and after 30 years $76,123. Simple interest at the same rate would give $24,000 after 20 years, so compounding adds about $14,700 on top. Now add $500 a month at 7% compounded monthly: after 20 years the same $10,000 start grows to roughly $300,900 if each deposit lands at the end of the month (about $302,400 if it lands at the start, which is the default here), of which $130,000 is money you put in and the rest is growth. Real markets do not return a steady 7%, so treat this as an illustration of the math, not a forecast.
What changes the result most
- Time: starting ten years earlier can matter more than doubling the monthly deposit.
- Regular deposits: they add new money that then compounds too.
- The rate: a one-point difference grows into a large gap over decades.
- Fees and taxes: they reduce the rate you actually keep.
To see how a plan has compared with real markets, use the benchmark lines in the calculator above. To practice without risking money, try the paper trading simulator or the free lessons.
Common questions
How does compound interest work?
Compound interest means you earn returns on your original money and on the returns already earned. Each period the balance grows by the rate, and the next period starts from the bigger balance, so growth speeds up over time.
What is the compound interest formula?
For a single deposit the formula is A = P × (1 + r/n)^(n × t), where P is the starting amount, r is the yearly rate as a decimal, n is how many times per year interest compounds and t is the number of years. With regular deposits, each deposit grows from the date it is added.
What is the Rule of 72?
The Rule of 72 is a shortcut: divide 72 by the yearly return to estimate how many years it takes money to double. At 7% a year that is about 10 years (72 ÷ 7 ≈ 10.3).
Does this calculator guarantee returns?
No. It shows what a steady rate would produce and compares it with how real market indexes behaved in the past. Real returns vary from year to year and can be negative. Yearly fees are included once you enter them, and taxes only appear in the account-type view, using rates you choose. It is for education only.
Does compounding daily instead of monthly make a big difference?
Only a small one. At 8% a year, $10,000 grows to about $22,196 after 10 years with monthly compounding and about $22,254 with daily compounding, a gap of roughly $57. The rate you earn and the time you stay invested matter far more than how often interest is added.
How long will my savings last if I withdraw money every month?
Use the "How long will the money last?" section of the calculator: enter a starting balance, a monthly withdrawal and a return, and it shows how many years the money lasts and the most you could take each month. A common rule of thumb is that first-year withdrawals of about 4% of the starting balance have often lasted around 30 years in past US market data, but that is not a guarantee.
What return should I use in a compound interest calculator?
There is no single right answer, so test a few. Many people try a conservative 4–5%, a middle 7%, and a higher 10%. The S&P 500 has averaged roughly 10% a year over the long run before inflation, and the calculator shows how it did in 2016–2025, a very strong decade. Turn on the low and high cases to see a range instead of one number.
The calculations, projections, and historical replay data generated by this simulator are provided strictly for illustrative, entertainment, and educational purposes. They do not constitute certified financial planning, legal, or investment advice, nor do they guarantee future market performance or compound yield. Financial markets carry substantial risk, and past performance is never indicative of future results. Taxes are only considered in the account-type view, using rates you set. We highly recommend conducting independent due diligence or consulting with a licensed fiduciary or financial professional before executing any investments. The operators of this platform assume no liability, responsibility, or warranty for potential software mathematical errors, omissions, or financial actions taken based on these outputs.
How this calculator works
Enter a starting balance, a monthly deposit, an expected yearly return and a time horizon, and the chart shows how your balance grows when you reinvest gains instead of withdrawing them. It is the same math behind why small, consistent contributions compound into large balances over the years. How much a market drop costs depends on when it lands and on your deposits, and the crash view lets you test an early one against a late one. It's a planning tool, not a prediction: real returns aren't smooth. Yearly fees are included once you enter them, taxes appear in a separate account-type view using rates you choose, and nothing here measures how hard it is to stay consistent.