What is compound return?
Compound return means the profit earned each period is added to your principal, so it itself starts earning additional profit in the next period. This exponential acceleration is why the famous "Rule of 72" estimates the years to double your money: 72 ÷ annual return rate ≈ the number of years needed to double the amount.
The Rule of 72 is a common mathematical approximation, not a precise calculation — it's just meant to give you a quick intuition, while the calculator above gives you the actual precise number based on your inputs.
FAQ
Is the 7% return rate fixed and guaranteed?
No, this is just a commonly cited illustrative figure for long-term index funds historically, not a guarantee or investment recommendation. Actual returns fluctuate year to year.
What's the difference between monthly and annual compounding?
The more frequent the compounding (monthly instead of annual), the slightly higher the final return, since profits are reinvested faster.
Source
Standard compound interest / compound return formula.
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Last updated: July 2026
This calculator is a general educational tool, and its results are hypothetical, not an investment recommendation or guarantee. Read the full disclaimer.