Compound Interest & Investment Wealth Calculator

Simulate long-term wealth growth, periodic contributions, compounding frequencies, and inflation-adjusted returns.

Configurable Calculation Inputs

Initial Investment: number (Default: 10000 $)
Monthly Contribution: number (Default: 500 $)
Investment Horizon (Years): slider (Default: 25 yrs)
Estimated Annual Return (%): number (Default: 8.5 %)
Compounding Frequency: select (Default: 12)

Mathematical Formula: Future Value with Periodic Contributions Formula

          A = P(1 + r/n)^(nt) + PMT * [ (1 + r/n)^(nt) - 1 ] / (r/n)
        

Where A is future balance, P is initial principal, r is annual nominal interest rate, n is compounding frequency per year, t is time in years, and PMT is monthly regular deposit.

Comprehensive Guide & Context

Why Time in the Market Beats Timing the Market

Compounding is exponential, not linear. In the first 10 years, contributions constitute the majority of portfolio value. After 20 to 30 years, compound interest generates over 70% to 85% of total wealth creation.

Automate monthly direct debits to take advantage of Dollar Cost Averaging (DCA).

Worked Calculation Examples

FIRE Early Retirement Starter

$25,000 starting portfolio, $1,000/mo deposits for 20 years at 9% index fund return.

Result: $812,450 portfolio value

Frequently Asked Questions

What is the Rule of 72?

The Rule of 72 is a quick mental math shortcut: divide 72 by your annual interest rate to find the approximate number of years it takes to double your money. (e.g., 72 / 8% = 9 years to double).