Compound Interest Calculator
Compound interest means earning interest on your interest — and over the years, it snowballs. Enter a starting deposit, monthly contribution, rate, and time horizon to see your projected balance, how much of it is pure interest, and a year-by-year growth chart.
$170,619
Final balance
$70,000
Total contributions
$100,619
Interest earned
Interest makes up 59.0% of your final balance — that's $100,619.05you didn't have to deposit.
How to Use Compound Interest Calculator
Enter your amounts
Type your initial deposit and any monthly contribution you plan to make.
Set rate and time
Enter an annual interest rate, pick a compounding frequency, and drag the years slider.
Read the projection
See your final balance, total contributions, interest earned, and the year-by-year growth chart.
About Compound Interest Calculator
How compound interest works
With simple interest, you earn only on your original deposit. With compound interest, each period's earnings are added to the balance, and the next period's interest is calculated on that larger amount. The formula for a lump sum is A = P(1 + r/n)^(nt), where r is the annual rate, n is compounds per year, and t is years. When you add monthly contributions, each deposit starts its own compounding clock — this calculator iterates month by month so contributions are credited exactly, rather than approximated with a formula.
Why time matters more than amount
The growth curve on the chart starts almost flat and steepens every year — that's compounding at work. At 7% annually, money roughly doubles every ten years, so a dollar invested at 25 can double four times by 65 while a dollar invested at 45 doubles only twice. This is why starting early with small contributions routinely beats starting late with large ones. Drag the years slider and watch the gap between the contributions line and the total balance line widen: that gap is money your money earned.
Choosing rate and compounding frequency
The rate you enter should match what you're modeling: high-yield savings accounts currently pay 4–5% APY, while the U.S. stock market has averaged about 10% annually before inflation (roughly 7% after) over the last century — with far more volatility. Compounding frequency (daily, monthly, quarterly, annually) matters less than people think: the difference between daily and annual compounding at 5% is only about 0.13 percentage points of yield. This is a projection tool, not investment advice — real returns vary year to year.
Common uses for Compound Interest Calculator
- Project what a retirement account could be worth in 10, 20, or 40 years
- See how much a monthly savings habit grows compared to the raw amount deposited
- Compare interest earned at savings-account rates versus stock-market average returns
- Show a child or student why starting to save early is such an advantage
- Estimate growth of a house down-payment fund on a fixed timeline
Frequently Asked Questions
What formula does this calculator use?
For accuracy with monthly contributions, it converts your annual rate and compounding frequency into an effective monthly rate — (1 + r/n)^(n/12) − 1 — then iterates month by month, growing the balance and adding your contribution. For a lump sum with no contributions, this matches the classic A = P(1 + r/n)^(nt) exactly.
How much difference does compounding frequency make?
Less than most people expect. $10,000 at 5% for 10 years grows to $16,289 with annual compounding and $16,486 with daily — about a 1.2% difference in the final balance. The rate itself and the time horizon dominate the outcome, which is why the years slider changes the chart far more dramatically than the frequency dropdown.
What rate of return should I assume?
Match it to the account: 4–5% for high-yield savings or CDs, 6–8% for a balanced portfolio, and around 10% before inflation (7% after) for the historical U.S. stock average. Long-term projections are sensitive to this number, so it's worth running a conservative and an optimistic scenario and planning between them.
Are contributions added at the start or end of each month?
At the end of each month, after that month's interest is applied — the standard 'ordinary annuity' convention used by most financial calculators. Beginning-of-month contributions would grow slightly more (one extra month of interest each), but the difference over long horizons is small.
Does this account for taxes or inflation?
No — the projection is in nominal, pre-tax dollars. In taxable accounts, interest and gains are taxed, and inflation (historically ~3% a year) erodes purchasing power. A common shortcut is to subtract expected inflation from your rate to see growth in today's dollars.