Compound Interest Calculator
Calculate how your savings grow over time with compound interest. See the power of compounding with different rates, time periods, and contribution schedules.
A compound interest calculator shows you how money grows when your earnings themselves start earning. Instead of interest being paid only on your original deposit (that's simple interest), compound interest pays you on your principal plus all previously accumulated interest — which is why Einstein reportedly called it "the eighth wonder of the world." Our free compound interest calculator lets you model any combination of starting balance, recurring contribution, annual return, and time horizon, so you can see exactly how long it takes a $10,000 seed to snowball into a six-figure portfolio.
This tool matters because small differences in rate, frequency, or time create dramatically different end values thanks to exponential growth. A 25-year-old who invests $300 a month at a 7% annualized return will finish with roughly $720,000 by age 65; the same investor starting at 35 ends with about $340,000 — less than half, despite contributing only a third less. That's the time value of money at work, and it's why financial planners emphasize starting early, staying consistent, and understanding your compounding frequency (daily vs. monthly vs. annual).
Who should use this compound interest calculator? Anyone running retirement projections, comparing high-yield savings accounts, evaluating CDs, stress-testing a brokerage portfolio, or teaching kids about investing. If you want a FIRE timeline instead, try the FIRE calculator; if you're targeting a specific dollar amount by a specific date, the savings goal calculator works backward from your target. Remember: this free tool is for education only and does not constitute financial advice — for major decisions, consult a certified financial planner.
Quick answer: Compound interest follows A = P(1 + r/n)^(nt). A $10,000 investment with $500/month added at 7% annual return compounded monthly grows to roughly $318,000 over 20 years — about $188,000 of that is compounded interest, not your deposits. Enter your principal, rate, and horizon below to calculate your exact future balance.
Inputs
Quick presetsYour one-time starting amount — e.g., $10,000 from existing savings. Enter 0 if you're starting from scratch.
How much you'll add every month. Typical ranges: $100–$500 (starter), $500–$1,500 (steady saver), $1,500+ (aggressive).
Expected annual return as a percent. Ballpark: 4–5% for a high-yield savings account, 6–7% for a diversified stock portfolio, 10% for US large-cap historical average.
How many years the money stays invested. Longer horizons amplify compounding — try 10, 20, and 30 to feel the difference.
How often interest is added back to the balance. Monthly is the common default for brokerages; daily is typical for savings accounts.
Results
How to use this calculator
Five inputs drive the math. **Initial investment** (principal) is the lump sum you're starting with today. **Monthly contribution** is how much you'll add on a recurring basis; typical taxable-brokerage figures range from $100 to $2,000. **Annual interest rate** is your expected rate of return expressed as a percentage — a high-yield savings account might be 4–5%, long-term US stock market averages sit near 7% real / 10% nominal. Be conservative; overestimating return is the #1 way these projections mislead.
**Time horizon** in years is how long the money stays invested. **Compounding frequency** determines how often interest capitalizes — monthly is standard for most brokerage and savings products, daily is common for savings accounts, annually for simple CDs. Once you hit Calculate, the output shows your final balance, total contributions, and total interest earned, so you can see how much of the growth came from your money vs. the market doing the work.
Worked examples
Alice, 28, starting a Roth IRA
Alice is a 28-year-old software engineer earning $95,000. She opens a Roth IRA with $1,000 and commits to contributing the annual maximum of $583/month ($7,000/year). Assuming a 7% average return compounded monthly until she turns 65 (37 years), the calculator shows her ending balance at roughly $1.08 million. Of that, only about $260,000 came from her own contributions — the remaining $820,000 is pure compound growth. If she delays just five years and starts at 33 instead, her final balance drops to around $740,000.
Ben, 45, catching up for retirement
Ben is a 45-year-old marketing director with $80,000 already saved and 20 years until retirement. He can now afford $1,500/month into an index fund. Entering $80,000 principal, $1,500/month, 7% return, 20 years, monthly compounding, the calculator projects roughly $1.09 million at age 65. Ben compares this to a more conservative 5% portfolio which yields only about $830,000 — a $260,000 gap that shows why asset allocation matters at his life stage.
The $100/month difference
A common question: "Is it really worth squeezing out an extra $100/month?" Take a baseline of $10,000 principal, $500/month, 7% return, 30 years, monthly compounding — that ends at roughly $669,000. Now bump the monthly contribution by just $100 (to $600/month) and hold everything else constant: the final balance climbs to about $791,000, a $122,000 gain from what adds up to only $36,000 of extra deposits over 30 years. That's the power of a small, consistent nudge — the market does the rest of the work through compounding. The narrative summary below the results highlights this sensitivity automatically for whatever inputs you choose.
Frequently asked questions
What's the formula?
A = P(1 + r/n)^(nt). With recurring contributions, add FV_contributions = PMT × [((1+r/n)^(nt) − 1)/(r/n)] and sum the two.
Compound vs. simple interest?
Simple interest pays only on the original principal; compound interest pays on principal plus accumulated interest. $10,000 at 5% for 20 years: simple = $20,000; compound annually = $26,533. The gap widens dramatically over longer horizons.
Does compounding frequency really matter?
Less than most assume. At 5% over 20 years on $10,000: annual compounding = $26,533, monthly = $27,126, daily = $27,181. The APY (annual percentage yield) quoted on savings products already bakes the compounding frequency in, so comparing APY-to-APY is apples to apples.
What return rate should I assume?
Ballpark: 4–5% for a high-yield savings account in the current environment, 6–7% real for a diversified stock portfolio, 10% nominal for the historical US large-cap average. Many experts suggest 6–7% nominal for conservative planning.
What about inflation?
This calculator outputs nominal dollars. To see today's-dollar terms, subtract your expected inflation rate (around 3% long-term) from the return rate, or use a separate inflation calculator on the resulting amount.
What about taxes?
Pre-tax growth is shown. Taxable accounts typically drag returns by 0.5–2 percentage points from dividends and capital gains. Roth accounts compound tax-free; Traditional IRA/401(k) defer until withdrawal.
How does this compare to the Rule of 72?
The Rule of 72 is a mental-math shortcut: 72 ÷ rate = years to double. It's accurate to within 5% for rates between 4% and 12%. Use the full calculator whenever contributions are involved.
Can I use this for debt?
Yes — debt compounds the same way but works against you. $5,000 at 22% APR with no payments would grow to around $37,000 in 10 years. For credit card payoff planning, use the debt-focused calculator instead.