Compound Interest Calculator

Compound interest generates returns on both principal and accumulated interest, creating exponential growth. The frequency of compounding impacts growth, with daily compounding producing slightly better results than annual. Time has exponential impact - starting early produces dramatically better outcomes than contributing larger amounts later.

Regular contributions amplify compound interest. Contributing $500 monthly for 30 years at 8% accumulates approximately $745,000, with about $565,000 from compound growth rather than contributions. A 2% difference in annual returns produces enormous wealth differences over decades - $100,000 at 6% for 30 years yields $574,000 while 8% yields $1,006,000 ($432,000 difference).

When you set up regular monthly contributions in the calculator above, you're modeling a strategy known as dollar-cost averaging (DCA). Instead of investing a lump sum all at once, DCA spreads your purchases over time — buying more shares when prices are low and fewer when prices are high.

Combined with compound interest, DCA is one of the most reliable long-term wealth-building strategies. Your regular contributions generate returns, and those returns generate their own returns, creating an accelerating growth curve over decades.