Free Investment Growth Calculator

Compound interest is one of the most powerful forces in finance. Albert Einstein reportedly called it “the eighth wonder of the world.” When your investments generate returns, those returns are reinvested and generate their own returns — creating exponential growth over time.

The key factors that determine your investment growth are: your initial investment amount, how much you contribute regularly, the rate of return, and most importantly — time. The longer you stay invested, the more dramatic the compounding effect becomes.

The Rule of 72

A quick way to estimate how long it takes to double your money: divide 72 by your annual return rate. At 7% returns, your money doubles approximately every 10.3 years. At 10%, it doubles every 7.2 years.

Why Starting Early Matters

Someone who starts investing $500/month at age 25 with 7% returns will have approximately $1.2 million by age 65. Waiting just 10 years to start (age 35) with the same contributions results in only about $567,000 — less than half, despite only 10 fewer years of investing.

Investment Strategies for Beginners

If you are new to investing, here are some proven approaches to grow your wealth over time:

• Dollar-Cost Averaging (DCA) — Invest a fixed amount regularly regardless of market conditions. This strategy reduces the impact of market volatility by buying more shares when prices are low and fewer when prices are high.
• Index Fund Investing — Instead of picking individual stocks, invest in low-cost index funds that track the entire market. The S&P 500 has returned an average of about 10% annually over the past century.
• Diversification — Spread your investments across different asset classes (stocks, bonds, real estate) and geographic regions to reduce risk without sacrificing expected returns.
• Maximize Tax-Advantaged Accounts — Use 401(k), IRA, and Roth IRA accounts to reduce your tax burden and keep more of your returns working for you.

Understanding Inflation-Adjusted Returns

Our calculator shows both nominal and real (inflation-adjusted) returns. Nominal returns are the raw percentage your portfolio gains. Real returns subtract inflation to reveal actual purchasing power growth. For example, if you earn 8% but inflation averages 3%, your real return is roughly 5%. Over 30 years, 3% inflation cuts the value of a dollar by more than half — so a $1 million nominal portfolio is worth only about $412,000 in today's dollars. Planning with real returns prevents a false sense of security.

For a detailed comparison of how different compounding frequencies affect growth, use our Compound Interest Calculator.

Common Investment Mistakes to Avoid

• Timing the market — Research shows that time in the market beats timing the market. Stay invested through market cycles.
• High fees — Expense ratios above 0.5% can eat significantly into your long-term returns. Choose low-cost index funds.
• Emotional trading — Selling during downturns locks in losses. Markets have recovered from every historic crash.
• Not rebalancing — Periodically rebalance your portfolio to maintain your target asset allocation.