Compound Interest Table & Cheat Sheet
Core Compound Interest Formulas
Where A = future value, P = principal, r = annual rate, n = years, m = compounding periods per year, and e = 2.71828.
Growth of $1,000 — Lump Sum (No Additional Contributions)
| Years | 4% Return | 6% Return | 8% Return | 10% Return | 12% Return |
|---|---|---|---|---|---|
| 5 | $1,217 | $1,338 | $1,469 | $1,611 | $1,762 |
| 10 | $1,480 | $1,791 | $2,159 | $2,594 | $3,106 |
| 15 | $1,801 | $2,397 | $3,172 | $4,177 | $5,474 |
| 20 | $2,191 | $3,207 | $4,661 | $6,727 | $9,646 |
| 25 | $2,666 | $4,292 | $6,848 | $10,835 | $17,000 |
| 30 | $3,243 | $5,743 | $10,063 | $17,449 | $29,960 |
| 40 | $4,801 | $10,286 | $21,725 | $45,259 | $93,051 |
Growth of $500/month — Regular Contributions
| Years | Total Contributed | At 6% | At 8% | At 10% |
|---|---|---|---|---|
| 5 | $30,000 | $34,885 | $36,738 | $38,668 |
| 10 | $60,000 | $81,940 | $91,473 | $102,422 |
| 15 | $90,000 | $145,475 | $173,019 | $206,552 |
| 20 | $120,000 | $231,020 | $294,510 | $379,684 |
| 25 | $150,000 | $346,497 | $475,513 | $662,504 |
| 30 | $180,000 | $502,810 | $745,180 | $1,130,244 |
| 40 | $240,000 | $995,745 | $1,745,504 | $3,162,040 |
The Rule of 72
| Annual Return | Doubling Time | Typical Investment |
|---|---|---|
| 2% | 36 years | Savings account |
| 4% | 18 years | Bond portfolio |
| 6% | 12 years | Balanced portfolio (60/40) |
| 8% | 9 years | Diversified equity portfolio |
| 10% | 7.2 years | S&P 500 historical average |
| 12% | 6 years | Aggressive growth portfolio |
Compounding Frequency Impact
How often interest compounds makes a difference — though less than most people think.
| Frequency | Periods/Year | $10,000 at 8% After 10 Years | Effective Annual Rate |
|---|---|---|---|
| Annually | 1 | $21,589 | 8.000% |
| Semi-annually | 2 | $21,911 | 8.160% |
| Quarterly | 4 | $22,080 | 8.243% |
| Monthly | 12 | $22,196 | 8.300% |
| Daily | 365 | $22,253 | 8.328% |
| Continuous | ∞ | $22,255 | 8.329% |
Key Takeaways
- Compound interest generates exponential growth — the longer the time, the more dramatic the effect
- The Rule of 72: divide 72 by your annual return to estimate doubling time
- Starting early matters more than contributing more — time is the biggest variable
- Regular monthly contributions supercharge compounding through dollar-cost averaging
- Compounding frequency (monthly vs. annually) makes a smaller difference than most people expect
Frequently Asked Questions
What is the difference between simple and compound interest?
Simple interest is calculated only on the original principal. Compound interest is calculated on the principal plus all accumulated interest. Over time, compound interest produces dramatically higher returns because you earn interest on your interest.
How does compound interest apply to stock market investing?
In stocks, compounding happens through reinvested dividends and capital appreciation. When dividends are reinvested, they buy more shares, which generate more dividends, which buy more shares — this is compounding in action even though stocks don’t pay “interest.”
What is the Rule of 72 and how accurate is it?
The Rule of 72 estimates the time to double your money: 72 ÷ annual return rate = years to double. It’s most accurate for rates between 4–12%. For rates outside this range, the Rule of 69.3 is more precise, but 72 is easier to divide mentally.
Does compounding frequency really matter?
Less than you’d think. The difference between annual and daily compounding on $10,000 at 8% over 10 years is only about $664. Focus on the rate of return and time horizon, not compounding frequency — those variables have a far larger impact.
How much should I invest monthly to reach $1 million?
At an 8% annual return: about $286/month for 30 years, $572/month for 25 years, or $1,698/month for 15 years. Starting early drastically reduces the monthly amount needed because compounding does more of the heavy lifting.