Compound Interest
Calculator
See how your money grows over time. Adjust your starting balance, return rate, contributions, and compounding frequency to model any investment scenario.
or use the slider below
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What is compound interest?
Compound interest is earning interest on your interest — not just your original principal. Instead of a flat return each year, your gains are reinvested and begin generating their own returns. Over long periods this creates exponential growth, which is why Albert Einstein (apocryphally) called it the eighth wonder of the world.
The more frequently interest compounds — weekly vs. yearly — the faster your money grows. A 10% annual rate compounding monthly beats the same rate compounding yearly, because each month's interest starts earning immediately.
How to use this calculator
Enter your starting balance, set your expected annual return rate using the slider, add any regular contributions you plan to make, choose how often your investment compounds, and pick your time horizon. The calculator instantly shows your projected final value, how much you contributed, and how much came purely from compound growth.
Use the year-by-year table to see exactly when your interest income starts outpacing your contributions — the point traders call "escape velocity."
Return rate benchmarks
- 4–6% — Conservative: bonds, high-yield savings, CDs, dividend stocks.
- 7–10% — Historical S&P 500 average (inflation-adjusted ~7%, nominal ~10%).
- 12–20% — Active strategies: covered calls, cash-secured puts, the wheel.
- 20%+ — Aggressive growth or concentrated positions. Higher volatility.
Options income strategies like the wheel can realistically target 12–20% annualized returns — significantly above the market average, which is why traders combine buy-and-hold with premium income.
The power of starting early
The single biggest factor in compounding is time — not return rate, not contributions. An investor who starts at 25 with $10,000 and never adds another dollar at 10% annual return ends up with more money at 65 than someone who starts at 35 and contributes $500 every month. That ten-year head start is nearly impossible to overcome.
Use the Compounder to model both scenarios and see for yourself why every financial advisor tells you to start investing as soon as possible, even with small amounts.