Savings
Compound interest: Index Funds (S&P 500)
How money grows in a Index Funds (S&P 500), with realistic rate assumptions and key context.
Typical parameters
| Parameter | Value |
|---|
| Typical annual rate | 10% |
| Compounding frequency | annual |
| 10-year growth on $10,000 | $25,937 |
| 30-year growth on $10,000 | $174,494 |
Index funds that track the S&P 500 have returned approximately 10% annually on average since 1957, or about 7% after inflation. Returns are highly variable year-to-year (-38% in 2008, +32% in 2019) but smooth out over long periods. Low expense ratios (0.03-0.2%) are critical — fees compound just as powerfully as returns.
Best use: Best for: long-term wealth building (10+ year horizon). Not suitable for money you might need in the next 3-5 years.
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