See how your money grows with the power of compounding
| Year | Balance | Interest Earned | Total Invested |
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Compound interest is interest calculated on both the initial principal AND the accumulated interest from previous periods. Albert Einstein reportedly called it the "eighth wonder of the world." The longer you invest, the more powerful compounding becomes — which is why starting early matters so much.
A = P(1 + r/n)^(nt), where A is the future value, P is principal, r is annual interest rate, n is compounding frequency per year, and t is time in years. With monthly contributions, each contribution is also compounded separately.
More frequent compounding means slightly more interest earned. Daily compounding yields the most, but the difference between daily and monthly compounding is usually small. The interest rate and time period matter far more than compounding frequency.
Regular monthly contributions dramatically accelerate growth. For example, investing $5,000 once at 8% for 20 years grows to ~$23,300. But adding just $200/month turns that into over $130,000 — showing the power of consistent contributions.