How compound interest works
Compound interest is the interest you earn on your interest. In the first year, you earn a return on the money you put in. In the second year, you earn a return on your original money plus the gains from year one — and on and on. That small loop, repeated for years, is what turns steady saving into a much larger number than you'd expect.
The math is simple but powerful: each period your balance grows by the periodic interest rate, then your next contribution is added. Repeat that for every month or year, and the line on the chart above curves upward — slowly at first, then noticeably faster. The longer your money compounds, the steeper that curve gets, which is why starting early matters so much more than starting big.
What the numbers mean for you
The big number at the top is your projected balance. But the details underneath tell the real story. The interest split shows how much of your final total you actually deposited versus how much your money earned on its own — for long time horizons, the interest can dwarf your contributions.
The effective annual rate (APY) shows what your nominal rate is really worth once compounding is factored in, and the time-to-double figure is the famous Rule of 72 in action — at 7% a year, money roughly doubles every decade. Finally, the “in today's money” toggle adjusts for inflation, because a six-figure balance decades from now won't buy what six figures buys today. Seeing the real, inflation-adjusted value keeps the projection honest.
Frequently asked questions
How much is $10,000 in compound interest over 10 years?
At a 7% annual return, $10,000 left to compound for 10 years grows to roughly $19,670 — almost doubling — without adding a single extra dollar. Enter your own figures above to see the exact number and the year-by-year path.
Does money really double every 7 years?
Close — that's the Rule of 72. Divide 72 by your interest rate to estimate the doubling time. At about 10% a year money doubles in roughly 7 years; at 7% it's closer to every 10 years. The calculator shows your exact doubling time at the top.
Is investing $100 a month worth it?
Yes. Consistency beats size. $100 a month invested at 7% for 30 years becomes well over $100,000 — and most of that final total is interest, not the money you put in. Small, regular contributions are exactly what compounding rewards.
What is the Rule of 72?
It's a quick mental shortcut: 72 divided by your annual interest rate gives the approximate number of years for your money to double. It's surprisingly accurate for the rates most savers and investors see.