See the power of compound interest. Enter your starting balance, monthly contributions, and expected return rate to watch your money grow.
Compound interest is interest calculated on both the initial principal and the accumulated interest from previous periods. The formula is A = P(1 + r/n)nt, where A is the final amount, P is the principal, r is the annual rate, n is compounding frequency per year, and t is time in years. At 7% annual return, money doubles approximately every 10.3 years (Rule of 72).
Compound interest is interest earned on both your original investment and on previously earned interest. Over time, this creates exponential growth. The formula is: A = P(1 + r/n)nt, where A is the final amount, P is the principal, r is the annual rate, n is the compounding frequency, and t is time in years.
When you also make regular contributions, the formula becomes more complex but the principle is the same: each contribution starts earning compound interest from the moment it's added. This is why starting early matters so much — even small amounts contributed in your 20s can grow dramatically by retirement.
A quick way to estimate how long it takes to double your money: divide 72 by your annual return rate. At 7% return, your money doubles approximately every 10.3 years. At 10%, every 7.2 years.
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