How to use the compound interest calculator
Enter how much you are starting with, how much you will add each month, the yearly interest rate or expected return, and how many years the money will grow. The calculator shows your final balance, how much of it you contributed, and how much came from interest. The chart and year-by-year table show how growth accelerates over time.
The compound interest formula
For a single deposit, the future value is A = P × (1 + r ÷ n)^(n × t), where P is the starting amount, r is the annual rate, n is how many times a year interest compounds, and t is the number of years. Regular monthly contributions each grow the same way for the time they are invested, so the calculator adds them month by month.
Example
Start with $10,000, add $200 a month, and earn 7% a year compounded monthly. After 20 years you would have about $144,600. You contributed $58,000; the other $86,600, about 60% of the final balance, came from compound interest.
Ways to make compounding work harder
- Start early. Ten extra years of growth often matters more than a larger monthly amount.
- Contribute consistently, and raise your contribution when your income grows.
- Keep fees low. A 1% yearly fee can take a large share of long-term growth.
- Reinvest earnings instead of withdrawing them.
Paying off high-interest debt is often the best "return" available. Compare with our credit card payoff calculator, and see how much you can save each month with the budget calculator.
Frequently asked questions
What is compound interest?
Compound interest is interest earned on both your original money and the interest it has already earned. Because each period's interest is added to the balance, growth speeds up over time, which is why starting early matters so much.
How often is interest compounded?
It depends on the account. Savings accounts often compound daily or monthly, while many bonds pay twice a year. More frequent compounding earns slightly more at the same stated rate, but the difference between monthly and daily is small.
What rate of return should I use?
For a savings account or deposit, use its current annual yield. For long-term stock investments, many people use a conservative long-run average, such as 5%–7% per year after fees. Returns are never guaranteed and vary from year to year.
What is the rule of 72?
Divide 72 by your annual interest rate to estimate how many years it takes money to double. At 6%, money doubles in about 12 years; at 9%, about 8 years.
Why does inflation matter?
Inflation reduces what money can buy. A balance that looks large in 30 years will purchase less than the same amount today. Turn on the inflation option in Advanced mode to see the result in today's money.
This guide is for general education and is not financial, tax, or legal advice. See our disclaimer.