Compound Interest Calculator
Watch how small, consistent investments grow into real wealth over time. Adjust the numbers and see the power of compounding in real time.
This free calculator is from The Budget Ledger, practical money guidance for everyday budgets and real-life planning.
The Rule of 72
Want to know how long it takes your money to double? Divide 72 by your annual return. At a 7% return, your money doubles roughly every 10 years (72 ÷ 7 ≈ 10). At 10%, about every 7 years. It's a quick way to feel the power of compounding without a calculator.
Best accounts for compound growth
- 401(k): especially with an employer match, that match is free money compounding on your behalf.
- IRA / Roth IRA: tax-advantaged growth that lets compounding work without the drag of annual taxes.
- Low-cost index funds: broad diversification with minimal fees, since high fees are compounding working against you.
How to start investing with $100
You don't need a fortune to begin. Most brokerages now offer fractional shares and zero account minimums, so $100 is plenty to start. The most important factor isn't how much you start with, it's how early you begin. Time is the most powerful ingredient in the entire formula.
Frequently asked questions
How does compound interest work?
Compound interest means you earn returns not just on your original money, but also on the returns it has already earned. Over time this snowballs: the balance grows slowly at first, then accelerates as the base gets bigger. The calculator above shows the effect year by year for your starting amount, monthly contribution, and rate.
What is the Rule of 72?
The Rule of 72 is a shortcut for how long your money takes to double: divide 72 by your annual return. At a 7% return your money doubles about every 10 years; at 10%, about every 7. It is a quick way to feel the power of compounding without a calculator.
How much will $100 a month grow to?
It depends on the rate and time. At a 7% average annual return, $100 a month becomes roughly $17,000 in 10 years, $52,000 in 20 years, and $122,000 in 30 years, and most of that is compounding rather than your own contributions. Enter your own numbers above to see your exact projection.
What rate of return should I use?
For a diversified stock index fund, a long-run average of about 7% after inflation (or roughly 10% before inflation) is a common, reasonable assumption. For a high-yield savings account, use its current APY, which is usually far lower. Being conservative with the rate keeps your plan realistic.
How do I start investing with a small amount?
You do not need a fortune. Most brokerages offer fractional shares and zero account minimums, so $100 is plenty to start. The most important factor is not how much you begin with, it is how early you begin, because time is the most powerful ingredient in compounding.
Where does compound interest work best?
In tax-advantaged accounts like a 401(k) (especially with an employer match) and an IRA or Roth IRA, held in low-cost index funds. Tax-advantaged growth lets compounding work without the annual drag of taxes, and low fees keep compounding working for you instead of against you.