Compound interest calculator
Financial
Plan your investments and see the power of compound growth.
Investment
Tips for digital nomads
- Start early
- Time is your greatest asset when it comes to compound interest.
- Be consistent
- Regular contributions significantly boost returns through dollar-cost averaging.
- Consider geo-arbitrage
- Leverage living in lower-cost locations while earning in stronger currencies.
- Reinvest dividends
- Automatically reinvesting dividends accelerates compound growth.
Final balance$0Real: $0
Total contributed$0
Interest earned$0Real: $0
Inflation-adjusted (real) values. The chart and year-by-year table are shown in today's money at the assumed inflation rate.
Growth projection
Key insights
Add an interest rate and investment period to see insights.
Year-by-year breakdown
| Year | Total contributed | Interest earned | Balance |
|---|---|---|---|
Understanding compound interest
How compound interest works
Compound interest allows your money to grow exponentially over time by earning interest on both your principal and accumulated interest.
The formula
A = P(1 + r/n)nt
A = P(1 + r/n)nt + PMT x ((1 + r/n)nt - 1) / (r/n)
Where: A = Final amount, P = Principal, r = Annual interest rate, n = Compounding frequency, t = Time in years, PMT = Regular payment
Historical market returns
| Asset class | Avg. annual return | Time period |
|---|---|---|
| S&P 500 (US) | ~10.5% | 1957-2023 |
| MSCI World Index | ~8.5% | 1970-2023 |
| US 10-Year Treasury Bonds | ~4.5% | 1970-2023 |
| Gold | ~7.2% | 1971-2023 |
| Real Estate (US) | ~8.6% | 1970-2023 |
Important: Past performance is not indicative of future results. Consider inflation (historically ~2-3% annually) when planning long-term investments.
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