Compound Interest Calculator
See how your money grows when interest earns interest. Adjust the inputs and watch the chart redraw in real time.
Results
Final balance
$0
Starting amount
$0
Total contributed
$0
Interest earned
$0
How compound interest works
Each period, you earn interest on the money you put in and on all the interest you've already earned. That second part — interest on interest — is the magic. The longer you let it run, the more dramatic it gets, which is why starting early matters far more than picking the perfect rate.
Switch the compound frequency between monthly and daily and watch the final balance change by a small amount. The frequency matters, but not nearly as much as time and rate.
The formula
where:
- A = final amount
- P = starting principal
- r = annual interest rate (as a decimal — 7% is 0.07)
- n = compounds per year
- t = time in years
- C = contribution per compounding period
The first term is your starting amount growing on its own. The second is the contributions, each one growing for whatever time remains until t.
Worked example
$10,000 at 7% for 20 years, compounded monthly, with no contributions: A = 10000 × (1 + 0.07/12)240 ≈ $40,387. Add $500/month and the answer jumps to roughly $300,000 — the magic isn't the rate, it's the contributions multiplied by the rate, over time.
Year-by-year
| Year | Balance | Contributed (cum.) | Interest (cum.) |
|---|
Frequently asked questions
Does compound frequency really matter?
A little. Going from annual to monthly compounding on a 7% rate over 20 years lifts the final balance by about 4%. Going from monthly to daily adds another ~0.2%. Pick monthly unless your bank explicitly says otherwise — it's the most common.
What rate of return should I assume?
Historical S&P 500 returns average around 10% nominal / 7% real (after inflation). A high-yield savings account is closer to 4–5%. CDs and bonds fall in between. For long-term retirement planning, 6–7% is a defensible middle.
What's the "Rule of 72"?
Divide 72 by your annual interest rate to estimate how many years it takes your money to double. At 6% it's 12 years; at 9% it's 8 years. It's an approximation but a startlingly accurate one for typical investment rates.
Is the result inflation-adjusted?
No — the number you see is the nominal future value. To get the real (inflation-adjusted) buying power, plug your assumed real rate of return into the rate field instead. For example, if you expect 7% nominal returns and 3% inflation, enter 4% to see the answer in today's dollars.
Why do my numbers differ from another calculator?
The most common reason: contribution timing. If contributions happen at the start of each period (annuity-due) instead of the end (annuity-ordinary), the final balance is slightly higher. This calculator deposits at the end of each compounding period. Differences are typically <1%.