The formula
Compound growth on a lump sum follows A = P(1 + r/k)kt, where P is the starting amount, r the annual rate, k how many times a year interest is added, and t the number of years. Regular deposits are handled separately as a future value of an annuity and added on top.
Why time beats the rate
Doubling your return sounds more powerful than adding ten years, but it usually is not. $10,000 at 7% becomes about $38,700 after 20 years and $76,100 after 30 — an extra decade almost doubles it again, with no extra risk and no extra deposits. This is why starting early is the single most repeated piece of investing advice, something we cover in depth in how compound interest builds wealth.
Compounding frequency matters less than people think
Moving from annual to daily compounding at 7% raises the effective rate from 7.00% to about 7.25%. Useful, but minor next to the rate itself and the length of time invested. Do not choose an account for its compounding frequency alone; compare the annual percentage yield, which already accounts for it.
Inflation and tax
This calculator shows nominal growth. If inflation runs at 3%, a 7% return is closer to 4% in real buying power. To see the result in today's money, enter your expected return minus expected inflation. To work towards a specific target instead, the savings goal calculator tells you the monthly amount you need. Tax on interest, dividends or gains reduces it further unless the money sits in a tax-sheltered account.