Compound Interest Calculator

The grey dashed line is $1,000 sitting still, earning nothing. The green line is that same $1,000 invested once and left alone, compounded monthly at 7.5% a year. The gold line adds your monthly contribution as an ordinary annuity, so each deposit lands at the end of its month and compounds from there — the most recent one has done almost nothing, and the first one has done all the work.

That split is the point of the chart. At $100 a month over 30 years the gold line ends near $144,000, but only $37,000 of that is money you actually handed over. The other $107,000 is growth. Run the same numbers at 10 years and it inverts: about $19,900 in total on $13,000 deposited. Growth does not overtake your own deposits until roughly year 17. Everything before that is mostly you. Everything after is mostly time.

Three things, and all of them make the real number smaller. Inflation: at 3% a year, a dollar 30 years out buys about 41 cents of what it buys today, so that $144,000 is closer to $59,000 in today's money. Fees: the chart runs at a clean 7.5%, and a fund charging 0.60% leaves you 6.9% — which sounds like a rounding error and costs about $16,700 over the same 30 years. Taxes: in a Roth IRA the chart is roughly honest, but in a taxable brokerage account dividends and eventual capital gains take a cut it never shows.

The one place the chart is unfair in the other direction is that flat grey line. Cash does not earn zero. At 4% in a savings account, $1,000 becomes about $3,243 over 30 years. The penalty for staying in cash is real, but the honest gap is to $3,243, not to $1,000.

A 7.5% average is not 7.5% every year, and the smooth curve is the most misleading thing on this page. Real returns arrive out of order — a flat decade, then a violent recovery, then a crash you did not plan for.

While you are still contributing, a bad early stretch is actually a gift: your monthly deposits buy more shares cheaply and the eventual recovery lifts all of them. That is the opposite of the sequence risk that hurts retirees drawing money down, which is why the same average return can produce very different outcomes depending on which decade you are in. Use this chart for the shape of compounding and the size of the contribution effect. Do not use it as a forecast.