Compound interest formula
where P is the starting amount, r the annual rate, n the number of compounding periods per year and t the number of years. Monthly contributions are added at the end of each month and earn interest from then on.
Example
Invest $10,000 today and $500 a month at 7% compounded monthly. After 25 years you'll have contributed $160,000 and your balance will be about $460,000. Nearly two-thirds of it is growth, not money you put in. That's the power that makes early saving so valuable for FIRE.
The rule of 72
Divide 72 by your annual return to estimate how long it takes money to double. At 7%, money doubles roughly every 10 years; at 10%, every 7 years.
Nominal vs real returns
If you enter a nominal return (for example, 9% for stocks), the result is in future dollars. To see the result in today's purchasing power, enter a real return instead (nominal return minus inflation, about 6% to 7%).
Frequently asked questions
How often is interest compounded?
Does compounding frequency matter much?
Last reviewed: 2026-10-09