Compound Interest Calculator
See how an initial amount plus regular contributions grows over time once compounding does its work.
How to use
- Enter your starting balance and how much you'll add each month.
- Set an expected annual return and number of years.
- The final balance and total growth update as you type.
How the Compound Interest Calculator works
Projects how an investment or savings balance grows when returns compound and you keep adding to it — the core arithmetic behind long-term saving.
The calculator steps forward one month at a time. Each month the balance earns the monthly rate, then your regular contribution is added. Running it month by month rather than using a closed-form annual formula means regular deposits are handled correctly.
each month: balance = balance × (1 + r) + contribution
Worked example
Starting with $10,000, adding $500 a month at 7% a year for 20 years ends near $306,000. You contributed $130,000 of that; the remaining $176,000 is growth.
Things worth knowing
- Returns are assumed steady. Real markets are volatile, and a bad sequence of early years matters more than the average suggests.
- The figure is nominal. At 3% inflation, money roughly halves in purchasing power over 24 years.
- Fees compound too. A 1% annual fee can consume a large share of a lifetime's growth.
Frequently asked questions
How does compound interest work?
Each period you earn returns on your balance and on previously earned returns, so growth accelerates over time.
Is the return guaranteed?
No. Investment returns vary year to year; this is an estimate using a constant average rate.
What is the rule of 72?
Divide 72 by the annual return to approximate the years needed to double your money. At 8%, roughly nine years.
Why do contributions matter more early on?
Every dollar added early is exposed to compounding for longer. A dollar invested at 25 does far more work than the same dollar at 45.
Does compounding frequency matter much?
Less than people assume. Moving from annual to monthly compounding at 7% changes the effective yearly rate from 7% to about 7.23%.