Investment Details
$
$
7%
20 years
How Compound Interest Works
Compound interest means you earn interest on your interest. The formula is: A = P(1 + r/n)^(nt), where A is the final amount, P is the principal, r is the annual interest rate (decimal), n is the compounding frequency per year, and t is the number of years.
The Rule of 72
Divide 72 by your annual return rate to find roughly how many years it takes to double your money. At 7%, your money doubles every 10.3 years. At 10%, it doubles every 7.2 years.
Why Monthly Contributions Matter More Than Rate
Adding a consistent monthly contribution often has more impact than chasing a slightly higher return rate. Even $100/month over 30 years at 7% adds over $121,000 to your final balance — on top of only $36,000 deposited.