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Compound Interest Visualizer

See how your investments can grow over time with the power of compound interest

Simulation
$
$
%

Historical S&P 500 average: ~10%

yr
ContributedInterest Earned
23%77%
Total Invested$370,000
Total Earned$1,229,717
Future Balance
$1,599,717
$1,229,717 Earned in 30 years
Your Contributions
Interest Earned

Simulating a recurring monthly deposit of $1,000 at 8% APY

"Compound interest is the eighth wonder of the world. He who understands it, earns it; he who doesn't, pays it."
— Warren Buffett
"Understanding both the power of compound interest and the difficulty of getting it is the heart and soul of understanding a lot of things."
— Charlie Munger

Frequently Asked Questions

Everything you need to know about compound interest

Compound interest is interest calculated on both the initial principal and the accumulated interest from previous periods. Unlike simple interest, which only earns on the principal, compound interest allows your money to grow exponentially over time as you earn 'interest on interest.'
Compound interest is most powerful when you have a long-term investment horizon and make consistent, regular contributions. The longer your money compounds, the more dramatic the growth. Starting early and maintaining disciplined, steady investments—even small ones—will yield far better results than trying to time the market with irregular large deposits.
Compound interest can compound at different frequencies: daily, monthly, quarterly, or annually. The more frequently interest compounds, the more your investment grows. For example, monthly compounding means interest is calculated and added to your balance 12 times per year.
APR (Annual Percentage Rate) is the simple interest rate per year, while APY (Annual Percentage Yield) includes the effect of compounding. APY is always higher than APR when interest compounds more than once per year, and it gives you a more accurate picture of your actual returns.
The amount matters less than consistency and time. Starting with even $100-$500 monthly can grow significantly over decades. The key is to start as early as possible and maintain regular contributions. Time in the market beats timing the market.
The S&P 500 has historically averaged around 10% annual returns over the long term (though past performance doesn't guarantee future results). Conservative estimates often use 6-8% to account for inflation and volatility. Your actual returns will vary based on your investment choices and market conditions.
The best time to start is now. Thanks to compound interest, even a few years can make a dramatic difference in your final balance. Starting at 25 versus 35 could mean hundreds of thousands of dollars more by retirement, even with the same monthly contributions.