Compound interest calculator
Project savings growth from initial deposit + periodic contributions. Daily, monthly, or annual compounding, with optional inflation adjustment for "today's dollars".
How much will your savings grow?
Breakdown
Inflation-adjusted (today's dollars)
Compound interest math, plain English.
Compound interest is interest earned on previously-earned interest. Einstein allegedly called it the eighth wonder of the world. The formula for an initial deposit alone is:
A = P × (1 + r/n)n·t
Where P = principal, r = annual rate, n = compounding periods per year, t = years.
With periodic contributions (a deposit every month, etc.) it gets more complex — each deposit compounds for less time than the previous one. This calculator simulates period-by-period: each compounding period interest is added, and on contribution-period boundaries the deposit is added too.
The compounding frequency matters less than you'd think. The difference between monthly and daily compounding on a 5% APR balance over 30 years is under 0.5%. Most US bank accounts compound daily but disclose APY (effective annual yield), which already includes compounding effect.
Inflation adjustment divides the final balance by (1+inflation)years to show what the money will actually buy in retirement. A $1M balance in 30 years at 3% inflation only has the purchasing power of ~$412k today.
Why this matters for 1099 income.
- Tax-savings buffer — many freelancers set aside 25–30% for taxes throughout the year. If you can hold that in a 4–5% HYSA between estimated tax payments, the compounding adds up.
- Lumpy income compounds harder — irregular freelance income invested as it comes in (vs all at once at year-end) earns roughly half a year of extra return. Real money over decades.
- Pair with Solo 401(k) or SEP-IRA for tax-advantaged compounding — this calc shows after-tax growth; retirement accounts get tax-deferred (or tax-free for Roth) compounding which is meaningfully larger.
- "Real" return matters most — set inflation to 3% to see purchasing-power growth. A 7% nominal return + 3% inflation = ~4% real growth, which is closer to what your retirement lifestyle actually feels like.
Rule of 72: divide 72 by your interest rate to estimate years to double. At 7% you double in ~10.3 years. At 4% (typical HYSA) you double in 18 years.