# Compound interest calculator

A compound interest calculator with a monthly contribution, a compounding schedule, and an animated chart of principal and growth, plus a savings-rate chart of years to retire.

## Reading the chart

The lower area is money you contributed. The upper area is growth. Early on, the lower area is most of the picture. Later, the upper area pulls away if the rate is positive and the horizon is long. Hover or move across the chart for a single year. The table under it is the same series, which is the version a screen reader can walk.

> The default — $10,000, $500 a month, 7% monthly, 30 years — is an illustration that finishes near $695,000. It is not a forecast and not a suggestion to invest at that rate.

## Questions

### How does this calculator compound?

Each month the contribution is added. At the end of each compounding period the balance is multiplied by one plus the annual rate divided by the number of compounds per year. Monthly is the default. Annual compounding on a lump sum matches principal times (1 + rate) to the years.

### What is the Shockingly Simple Math section?

It charts years to financial independence against savings rate, starting from zero. Spending is the unsaved share of income. The portfolio target is that spending divided by 4%. The default return is a 5% real return. A popular FIRE essay used this relationship to argue that savings rate dominates the calendar. The chart here is our calculation of that idea, not a copy of the essay.

### Are taxes and fees included?

No. Lower the rate by an expense ratio if you want a net illustration. Taxes on interest, dividends, and gains depend on the account and are not in the chart. A workplace plan and a taxable account with the same pre-tax return do not finish in the same place.

HTML: https://wealthcompounds.com/compound-interest-calculator

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Educational only. Not investment, tax, or financial advice. Canonical HTML: https://wealthcompounds.com