Compound Interest Calculator
See how your savings and investments grow over time with compound interest and optional monthly contributions. Free, private, and easy to use.
Enter your details to see your money grow.
Add your starting amount, rate, and timeline to see a year-by-year compound interest breakdown.
How Compound Interest Works
Compound interest means you earn returns not only on the money you put in, but also on the interest that money has already earned. Think of it as a snowball: each year the balance is a little larger, so the next year’s interest is calculated on a bigger number.
Early on, growth can look modest. Over longer periods—especially with regular contributions—the curve steepens. That is why starting early and staying consistent often matters more than finding a “perfect” rate.
The Compound Interest Formula
For a lump sum without ongoing deposits, the classic formula is:
A = P(1 + r/n)nt
- A = final amount
- P = principal (starting amount)
- r = annual interest rate (as a decimal)
- n = number of times interest compounds per year
- t = number of years
When you add monthly contributions, each deposit compounds for the remaining time until the end of your timeline. This calculator applies interest each compounding period and adds your contribution so you can see realistic growth for savings and investment plans—not just a one-time deposit.
Example: $10,000 + $200/Month at 7% for 20 Years
Suppose you start with $10,000, contribute $200 every month, and earn an average of 7% per year, compounded monthly, for 20 years.
In this example, more than half of the ending balance comes from interest—not from deposits. That is the power of compounding over two decades with steady contributions.
Tips to Maximize Compounding
- Start as early as you can. Extra years of growth often outweigh waiting for a larger starting balance.
- Contribute regularly. Automatic monthly deposits turn compounding into a habit instead of a one-time decision.
- Leave earnings invested. Withdrawing interest resets the snowball; reinvesting keeps it rolling.
- Watch fees and high-interest debt. Fees reduce your effective return, and credit card interest can erase gains elsewhere.
- Stay consistent through ups and downs. Markets fluctuate; long horizons are what make compounding work for investors.
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This calculator is for educational purposes only and does not provide financial advice. Actual returns vary and are not guaranteed.
Frequently Asked Questions
What is compound interest?
Compound interest is interest earned on both your original money and the interest you have already earned. Over time, that “interest on interest” can grow your balance much faster than simple interest, which only pays on the starting amount.
How do monthly contributions affect compound interest?
Regular monthly contributions add new money that also starts earning interest. Even small, consistent deposits can dramatically increase your final balance because each contribution has more years to compound.
How often should interest compound?
More frequent compounding (monthly or daily vs. annually) earns slightly more, all else equal. For long-term investing, the rate of return and how long you stay invested usually matter more than the compounding frequency alone.
Is 7% a realistic annual return?
A 7% annual return is a common long-term stock market average after inflation adjustments in educational examples. Actual returns vary year to year. Past performance does not guarantee future results, and this calculator is for estimates only.
What is the difference between compound interest and simple interest?
Simple interest is calculated only on your original principal. Compound interest is calculated on principal plus accumulated interest. Over many years, compounding usually produces a much larger balance than simple interest at the same rate.
Can I use this for retirement or investment accounts?
Yes. You can model savings accounts, CDs, brokerage accounts, or retirement contributions by entering your starting balance, monthly deposits, expected annual return, and time horizon. Results are educational estimates, not personalized financial advice.