Calculate compound interest and watch your money grow.

Compound interest means you earn returns not just on your original investment, but on every dollar of growth you have already accumulated. In year one, $10,000 at 10% earns $1,000. In year two, you earn 10% on $11,000 — not $10,000. That extra $100 seems trivial. Over 30 years it is not. The same $10,000 grows to $174,494 with annual compounding — versus $40,000 with simple interest at the same rate.

Compounding frequency matters too, but less than most people expect. Daily compounding on $10,000 at 10% over 10 years produces $27,179 — versus $25,937 with annual compounding. The difference is $1,242. What matters far more than frequency is time and rate. One extra percentage point of return over 30 years is worth more than switching from annual to daily compounding.

Monthly contributions accelerate this dramatically. Adding just $500 per month to a $10,000 starting balance at 10% annual return compounds to $1,132,832 over 30 years — versus $174,494 without contributions. The contributions themselves only total $180,000. The remaining $952,000 is pure compounding. This is why starting early matters more than starting with a large amount.