Compound Interest Calculator
Compound interest is interest earned on interest: each period, your returns are added to the balance, and the next period's growth is calculated on that larger amount. Over long periods this snowballs, which is why starting to invest early matters more than investing large amounts later.
- Final balance
- $144,572.72
- Total contributed
- $58,000.00
- Total growth
- $86,572.72
Use this calculator to project the future value of an investment or savings account. Enter your starting balance, an optional monthly contribution, the expected annual return, and the number of years, and it will show the final balance along with how much of it came from your own deposits versus growth.
How it's calculated
A = P(1 + r/n)ⁿᵗ
A is the final amount, P is the initial principal, r is the annual rate (decimal), n is the number of compounding periods per year, and t is the time in years. Monthly contributions are added at the end of each month and then compound along with the balance.
Worked example
Starting with $10,000, adding $200 per month, at a 7% annual return compounded monthly for 20 years: the final balance is about $143,240. Your total deposits were $58,000, so the remaining $85,240 is compound growth.
Frequently asked questions
›What annual return should I assume?
It depends on the investment. Historically, broad stock market index funds have returned around 7–10% per year before inflation over long periods, while high-yield savings accounts typically pay much less. Use a conservative figure for planning.
›What does compounding frequency mean?
It is how often interest is calculated and added to the balance: yearly, monthly, or daily. More frequent compounding grows slightly faster, though the difference between monthly and daily is small at typical rates.
›Does this account for inflation or taxes?
No. The result is a nominal, pre-tax figure. To think in today's purchasing power, subtract an assumed inflation rate (commonly 2 to 3%) from your expected return before calculating.
›Why do early contributions matter so much?
Because each contribution compounds for the entire remaining time. A dollar invested at 25 has roughly twice as long to grow as a dollar invested at 45, which can make it worth several times more by retirement.
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