Compound Interest Calculator
Future value of an investment growing with compound interest plus monthly contributions, with a year-by-year line chart (linear or log scale) of balance vs. cumulative contributions.
Result
- Initial principal$10,000.00
- Total contributions240 monthly deposits$70,000.00
- Interest earned$100,619.05
- Effective multiplierfinal value ÷ contributions2.44×
Balance over time
Solid line: projected balance. Dashed line: cumulative contributions (no growth).
How to use this calculator
- Enter your starting balance (or 0 if you're starting fresh).
- Add a realistic monthly contribution you can actually maintain.
- Use 7% as a long-term US stock-market average; 4% for bonds; 10%+ is optimistic.
- Compare 20 vs 30 years to see the late-stage compounding effect.
About this tool
Compound interest is the engine behind nearly every long-term wealth-building strategy. This calculator shows what your money becomes when it earns returns, and those returns earn returns. Enter an initial deposit, optional monthly contributions, the expected annual return, and how long you'll let it grow. Try changing the time horizon — the difference between 20 years and 30 years isn't 50% more, it's often 3× more, because the late years compound on a much larger base. Compounding frequency (monthly vs. annual) matters less than people think; what really moves the needle is rate of return and time.
What this calculator does
This calculator returns the future value of a single starting deposit plus regular monthly contributions, growing at a fixed annual rate compounded at the frequency you choose (annual, quarterly, monthly, or daily). It separates total contributions from interest earned, shows a side-by-side comparison with and without contributions, projects what an extra ten years adds, and contrasts your rate against a 4% bond benchmark. The math is the standard compound-interest formula plus a monthly annuity for contributions — the same approach SEC Investor.gov uses.
How it works — the formula
A = P(1 + r/n)^(n·t) (discrete compounding)
A = P · e^(r·t) (continuous compounding)P is the principal, r is the annual rate (decimal), n is the number of compounding periods per year, and t is years. As n grows, the discrete formula approaches the continuous form via the limit definition of e (Euler's number). Effective annual yield is APY = (1 + r/n)ⁿ − 1; the Truth in Savings Act (Regulation DD) requires US banks to disclose APY for deposit accounts.
Worked examples
- Inputs:
- P = $10,000, r = 7%, n = 1, t = 30
- Output:
- A = $10,000 · 1.07³⁰ ≈ $76,123
Baseline case — single compounding per year. The growth is dominated by t, not n: doubling years adds far more than doubling compounding frequency.
- Inputs:
- P = $10,000, r = 7%, n = 12, t = 30
- Output:
- A = $10,000 · (1 + 0.07/12)^360 ≈ $81,165
Effective annual yield rises to ~7.23%. Monthly compounding adds ~$5,000 over 30 years vs annual — material, but small next to a 1% rate change.
- Inputs:
- P = $10,000, r = 7%, t = 30
- Output:
- A = $10,000 · e^(0.07·30) ≈ $81,662 — the upper bound for any compounding frequency at this rate
Continuous compounding is the mathematical limit as n → ∞. Only ~$500 more than monthly — proves that increasing n past monthly hits sharply diminishing returns.
When to use this vs other tools
Compound Interest answers "what does my money become if it grows steadily?". For a specific goal, retirement plan, or single-investment return, a more targeted tool is faster.
- Savings Goal Calculator
Use when you have a target amount and deadline and need to back out the monthly contribution. Savings Goal solves for the contribution; Compound Interest solves for the final balance.
- Retirement Calculator
Use for retirement projections — Retirement Calculator models pre- and post-retirement phases, the 4% safe-withdrawal rule, and inflation drag on real purchasing power.
- 401(k) Calculator
Use to model employer-match dynamics and IRS contribution limits, which materially change the math for tax-advantaged retirement accounts.
- Investment Return Calculator
Use to compute the realised return on an existing investment from start and end values, dividends, and date range — not a forward projection.
Authority note
The SEC publishes Investor.gov compound-interest tooling as the authoritative consumer-facing reference. Truth in Savings (Regulation DD, 12 CFR Part 1030) requires US banks to disclose APY computed via the same compounding formula used here.
Limitations
- A constant rate is rarely realistic over long horizons — equity returns vary year to year, and sequence-of-returns risk matters during withdrawals.
- Tax drag (interest taxed annually outside tax-advantaged accounts) is not modeled.
- Inflation can substantially erode nominal returns; toggle to a real-return assumption for long-horizon goals.
- Real-world compound interest is bounded by counterparty risk — bank insolvency, bond default, etc.
Projection assumes a constant rate. This calculator does not provide financial advice — past returns do not guarantee future results.