What is Compound Interest Calculator?
A compound interest calculator simulates the exponential growth of money over time. Unlike simple interest, compound interest reinvests the returns earned each period so that future returns are calculated on both your original contributions and accumulated profits. This compounding effect is the foundation of long-term wealth building.
Stock market benchmark rates, and why they differ
Published long-term rates for the S&P 500 range from about 5% to about 15%, and every one of them is correct for its own period and definition. The rows below are what named sources publish, with the period and the basis stated next to each figure. This calculator does not preset a rate for you, because any single number in the form would be a forecast rather than a measurement.
| Source | Reported figure | Period and basis |
|---|---|---|
| Schwab MoneyWise | 14.8% | S&P 500, 10 years, realized |
| Schwab MoneyWise | 11.3% | S&P 500, 55 years, 1970 to 2025, realized |
| Capital Group | about 10% | S&P 500, since 1926, nominal |
| iShares | 8.59% | S&P 500, nominal; its own flows |
| BlackRock Capital Market Assumptions, December 2024 | 5.00%, 5.70%, 6.70% | Projected, for 5, 10 and 20 years ahead |
| S&P Dow Jones Indices, official index page | no single figure published | Publishes trailing 1, 3, 5 and 10 year windows, updated daily, as price return, total return and net total return |
When an investment calculator helps
- Projecting long-term stock and ETF portfolio growth
- Visualizing the compound advantage vs simple deposits
- Simulating retirement savings adjusted for inflation
Privacy
Projections run entirely in your browser memory. Your investment numbers never leave your device.
Quick tips
- Toggle Inflation Adjustment to see the real purchasing power of your future wealth in today’s value.
- The Compound Advantage badge shows exactly how much extra money compounding generated for you.
- Regular monthly contributions over 10+ years often amplify wealth significantly more than initial principal alone.
How to project investment growth with compound interest
- Enter your starting principal, expected annual return rate, and investment timeframe
- Add optional monthly contributions and select compounding frequency (monthly, annually)
- Toggle inflation adjustment to project real future purchasing power
- Inspect the interactive growth chart, copy the plan summary, or download CSV schedule
Compound Interest & Investment FAQ
What is the Compound Advantage?
The Compound Advantage is the extra wealth generated purely by interest compounding on prior interest, over and above the total money you deposited out of pocket.
How does inflation affect my investment returns?
While nominal balance reflects the actual currency amount you will have in the future, inflation erodes purchasing power over time. Our calculator allows you to discount future balances by an annual inflation rate to project real purchasing power.
What compounding frequency should I choose?
Most retail index funds and high-yield savings accounts compound monthly or daily. More frequent compounding slightly increases the annual percentage yield (APY).
Can I export my year-by-year investment schedule?
Yes. You can download the complete year-by-year schedule as a CSV spreadsheet or copy a structured summary of your plan with one click.
Are my financial calculations saved or tracked?
No. Everything is computed in client-side JavaScript. No net worth figures, contribution rates, or balances are ever transmitted to a server.
What is the difference between simple and compound interest?
Simple interest is earned only on your original principal, so growth is linear. Compound interest is also earned on previously earned interest, so growth accelerates over time. At the same rate, compounding always returns at least as much as simple interest, and the gap widens the longer you stay invested.
What is a realistic annual return rate to use?
It depends on the asset and on the period you measure, and published long-term stock index figures disagree with each other by a factor of two or more. The benchmark table above shows what named sources report and over which period, which is why this calculator does not preset one rate. Enter the rate you have a reason to use, treat it as a planning assumption rather than a promise, and use the inflation adjustment to see what it means in purchasing power.