Compound Interest Calculator

Einstein's "Eighth Wonder of the World"

Compound interest is earning interest on your interest. Over long periods, it creates exponential wealth growth.

The 3 Levers of Wealth

1. Time: The most powerful factor. Starting 10 years earlier creates significantly more wealth than saving twice as much later. 2. Rate of Return: * Savings Account: ~0.5% - 4% (struggles to beat inflation). * Stock Market (S&P 500): ~7-10% historical average (inflation-adjusted). * Real Estate: ~3-5% appreciation + Cashflow. 3. Consistency: Regular monthly contributions dollar-cost average your entry and smooth out market volatility.

💰 Rule of 72

Want a quick mental math trick? Divide 72** by your interest rate to find out how many years it takes to **double your money. * 7% Return: 72 / 7 = ~10.2 Years to double. * 10% Return: 72 / 10 = ~7.2 Years to double.

Frequently Asked Questions

Q: Is 7% realistic? A:** Historically, the S&P 500 has returned about 10% annually before inflation. adjusting for 3% inflation, **7% is a commonly accepted figure for long-term purchasing power growth.

Q: Should I contribute monthly or yearly? A: Monthly is usually better ("Dollar Cost Averaging"). You buy more shares when prices are low and fewer when high, often lowering your average cost basis.