Calculate how your investments grow over time with compound interest and regular contributions
Compound interest is interest calculated on the initial principal plus all accumulated interest from previous periods. It's often called "interest on interest" and is the key to building wealth over time.
Compound Interest Formula:
A = P(1 + r/n)^(nt)
Time is your greatest asset when it comes to compound interest. The earlier you start investing, the more time your money has to grow exponentially.
$200/month for 40 years at 7% = $525,000
Total invested: $96,000
$200/month for 30 years at 7% = $246,000
Total invested: $72,000
10 years of delay costs over $279,000 in growth!
How often interest compounds can significantly affect your returns. More frequent compounding means interest is calculated and added to your principal more often.
Adding regular contributions dramatically accelerates wealth building through:
Investment gains are typically taxable. Consider tax-advantaged accounts like:
Inflation erodes purchasing power over time. A 3% inflation rate means prices double every 24 years. Always consider real returns (returns minus inflation) when planning long-term goals.