SuperCalc

Compound Interest Calculator

Albert Einstein supposedly called compound interest the eighth wonder of the world. Whether or not he did, the math behind it shapes every long-term investment decision. See exactly how your money grows when each year's gains earn their own gains — with monthly compounding, optional annual step-ups, and an inflation lens that translates your future numbers into today's purchasing power.

Wealth planner

Wealth Projection

Project where your money goes — building it up, drawing it down, or both across your full timeline.

$
$
% / yr
years
% / yr

Common: 5–10% as your income grows. 0 to keep contributions flat.

Inflation (optional)

Adds a 'today's money' view so big future numbers are honest about lost purchasing power.

% / yr

0 to ignore

Your projection
Future value
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Contributed
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Returns
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Multiplier
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How it works

Compound interest is interest earned on previously-earned interest. Each month's return is computed on the current balance — which already includes prior returns. Over decades, this is dramatic: in a typical 30-year compounding plan, more than two-thirds of the final balance is growth, not contributions.

The standard formula is A = P × (1 + r/n)^(nt), where P is principal, r is the annual rate, n is compounding frequency per year, and t is years. We compute it iteratively (month by month) so the calculator can handle monthly contributions, annual step-ups, and inflation in the same pass.

The chart's most important moment is the compound crossover — the year your annual returns first exceed your annual contributions. Before this point, you are the engine. After, the market is. For a typical retirement-style plan at 8% return, this lands around year 15.

FAQ

What's the difference between simple and compound interest?
Simple interest only earns on the original principal. Compound interest earns on the principal AND on previously earned interest, so growth accelerates over time. Almost all real-world investments (stocks, bonds, savings accounts, mutual funds) compound. Most consumer loans use compound interest too — against you.
How is monthly compounding different from annual?
Monthly compounding calculates returns 12 times a year instead of once, so each month's small gain immediately starts earning its own returns. The difference is real: at 8% annual rate, monthly compounding produces ~8.30% effective annual yield, while annual compounding gives exactly 8%. We use monthly compounding because it matches how real-world investments behave.
What return rate should I use?
For long-term equity returns, 8–10% nominal is reasonable (US stocks have averaged ~10% historically). For mixed portfolios with bonds, 6–8%. For savings accounts and CDs, 3–5%. Always remember nominal rates include inflation — subtract your inflation rate to see real returns.
Should I include inflation?
Yes, especially for time horizons over 10 years. A $1M portfolio in 30 years with 3% inflation has the buying power of roughly $412k today — less than half the headline number. Add an inflation rate to see your future numbers in today's purchasing power.
What's an annual contribution step-up?
It's an annual percentage increase to your monthly contribution. If you start at $500/mo with a 10% step-up, year 2 you contribute $550/mo, year 3 you contribute $605/mo, etc. This models the natural growth of contributions as your income rises. A 10% step-up over 25 years can more than double your final corpus vs. flat contributions.
Are my numbers stored anywhere?
Only in your browser's local storage so they survive a refresh. The calculation request goes to a stateless API — nothing is logged or stored server-side.

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