Compound Interest Calculator

Plan your investments and see the power of compound growth over time. Perfect for digital nomads building their nest egg while traveling.

Investment Parameters

Initial Investment

The amount you start with in your investment account. For example, $1,000 from your savings.

Monthly Contribution

How much you add to your investment each month. Regular contributions can significantly boost your returns over time.

Annual Interest Rate (%)

The annual percentage rate your investment is expected to earn.

Historical averages:

S&P 500: ~10.5% (1957-2023)
Global Stocks: ~8-9%
Bonds: ~3-5%

Compounding Frequency

How often interest is calculated and added to your balance. More frequent compounding (e.g., monthly vs. annually) results in slightly higher returns over time.

Investment Period (Years)

The length of time you plan to invest. Due to compound interest, even small differences in investment time can result in massive differences in total returns.

Currency

Select your preferred currency for displaying calculated values. This doesn't affect the calculation itself, only how values are displayed.

Chart Type

Choose how to visualize your investment growth. Bar charts are better for comparing contributions vs. interest, while line charts better show the exponential growth curve over time.

Bar Line

Final Balance

Total Contributed

Interest Earned

Growth Projection

Compound Interest Tips for Digital Nomads

Start Early

Time is your greatest asset when it comes to compound interest. Even small amounts can grow significantly when compounded over decades.

Be Consistent

Regular contributions, even small ones, can significantly boost your returns over time through dollar-cost averaging.

Consider Geo-Arbitrage

As a digital nomad, you can leverage living in lower-cost locations while earning in stronger currencies to boost your investment rate.

Reinvest Dividends

Automatically reinvesting dividends can significantly accelerate your compound growth over long periods.

Understanding Compound Interest & Investment Returns

How Compound Interest Works

Compound interest is often called the "eighth wonder of the world" because it allows your money to grow exponentially over time by earning interest on both your principal investment and accumulated interest.

The Formula

For a principal amount with no additional contributions:

A = P(1 + r/n)^nt

For regular periodic contributions:

A = P(1 + r/n)^nt + PMT × ((1 + r/n)^nt - 1) / (r/n)

Where:

A = Final amount
P = Principal (initial investment)
r = Annual interest rate (decimal)
n = Compounding frequency per year
t = Time in years
PMT = Regular payment amount

This calculator uses a simulation-based approach that calculates growth on a month-by-month basis, accounting for both the compounding of interest and the addition of regular contributions.

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 Note:

Past performance is not indicative of future results. All investments involve risk, and returns can vary significantly based on many factors including economic conditions, market volatility, and investment strategy.

Inflation Consideration

When planning long-term investments, consider that inflation (historically ~2-3% annually) will erode purchasing power over time. To estimate real returns, subtract the expected inflation rate from your investment returns.

The Power of Time and Consistent Investing

Starting early and investing consistently through market ups and downs (dollar-cost averaging) can have a profound impact on your long-term financial goals. Even small amounts invested regularly can grow significantly due to the compounding effect.