The Magic of Compound Interest

Albert Einstein reportedly called compound interest "the eighth wonder of the world." Whether or not he actually said it, the power of compound interest is undeniable.

The Compound Interest Formula

A = P(1 + r/n)^(nt)

A = Final amount, P = Principal, r = Annual rate, n = Compounding frequency, t = Time in years

The Rule of 72

A quick way to estimate how long it takes to double your money:

Years to Double = 72 / Interest Rate (%)

Rate	Time to Double

3%	24 years
5%	14.4 years
7%	10.3 years
10%	7.2 years

$10,000 Growth Over Time

Period	3%	5%	7%	10%

10 yrs	$13,439	$16,289	$19,672	$25,937
20 yrs	$18,061	$26,533	$38,697	$67,275
30 yrs	$24,273	$43,219	$76,123	$174,494

Monthly Contributions: $500/month

Period	Total Contributed	At 5%	At 7%	At 10%

10 yrs	$60,000	$77,641	$86,541	$102,422
20 yrs	$120,000	$205,517	$260,464	$363,437
30 yrs	$180,000	$416,129	$610,498	$1,130,244

Three Key Principles

Start early — Starting 10 years sooner beats doubling your investment amount

Stay consistent — Time in market beats timing the market

Minimize fees — A 1% fee difference compounds to millions over decades

Try our compound interest calculator to simulate your own investment journey.

The Magic of Compound Interest: Your Money in 10, 20, 30 Years