Compound Interest Calculator
Discover the power of compound interest. See how your money can grow exponentially over time.
Enter your details
Adjust values to see your returns
The lump sum you're starting with.
Extra you add every month. Set to 0 for a lump sum only.
The S&P 500 has averaged ~10% annually before inflation.
Longer time horizons benefit most from compounding.
Advanced: compounding frequency
12 = Monthly, 4 = Quarterly, 1 = Annually, 365 = Daily
Your results
$10,000 at 10% for 10 years
Future value
$45,923.81
Total contributed
$22,000
Total interest
$23,923.81
Investment growth over time
Watch your money grow year by year
What is compound interest?
How this compound interest calculator works
Compound interest is interest calculated on your starting balance and also on the interest that balance already earned. People call it "interest on interest," and it is the reason a dollar invested today is worth more than a dollar invested next year. The interest itself starts earning interest, and that snowballs the longer the money sits.
Enter a starting balance, a monthly contribution, an expected return, and a time horizon, and the calculator grows both pieces forward together. The more frequently the interest compounds, and the longer the horizon runs, the bigger the gap gets between what you put in and what you end up with.
Why time matters more than the amount
Someone who invests $200 a month starting at 25 usually ends up with more money at 65 than someone who invests $400 a month starting at 35, even though the second person put in more total dollars. The first person's money simply had ten extra years to compound. Time does more of the work than the size of the contribution, which is the opposite of how most people think about saving.
This is also why people get discouraged and quit early. The growth looks flat for the first several years, since a small balance earning a percentage return is still a small number. The curve only starts looking dramatic once the balance itself gets large enough for the same percentage to mean real money.
What breaks the compounding
Withdrawing money early does not just remove that amount. It also removes every year of growth that money would have earned going forward. Pulling $5,000 out in year five of a 30-year plan costs far more than $5,000 by the end, because that money never gets the remaining 25 years to compound. Fees work the same way in reverse: a 1% annual fee sounds small, but it compounds against you every year, quietly eating into the same growth you're trying to build.
How this is calculated
It grows your starting balance and every monthly deposit forward to the end of your time horizon.
Your lump sum earns interest that compounds each period: balance × (1 + rate ÷ periods) raised to the power of periods × years. Each monthly deposit is grown forward too, using an equivalent monthly rate, and the two are added together.
What it assumes
- The return is a steady average. Real markets bounce around year to year.
- Deposits are added at the end of each month.
- No taxes, fees, or inflation are subtracted.
Frequently asked questions
What's a realistic annual return to use?
For a broad stock market index fund, 7-10% a year has been a reasonable long-term average before inflation, though any single year can swing far outside that range. For a high-yield savings account or conservative mix, 4-5% is more realistic. Use a lower number if you want a conservative estimate.
Does this account for taxes or inflation?
No. The result shown is nominal growth before taxes, fees, and inflation are subtracted. In a taxable account, investment growth is generally taxed when sold; inflation typically erodes purchasing power by a few percent a year, so the real, spending-power value of the ending balance will be lower than the number shown.
How often does the calculator compound interest?
Monthly, by default, which is a common convention for savings and investment accounts and closely approximates daily compounding for most practical purposes over multi-year time horizons.
Why does a small rate difference change the result so much?
Compounding is exponential, not linear, so a difference in rate compounds every single period. Over 20-30 years, a 2 percentage point difference in return (say, from fees) can mean tens of thousands of dollars, even on a modest starting balance.
Results are estimates for educational purposes only, based on the values you enter and a constant rate of return. Real markets rise and fall, so your actual results will differ. This is not financial advice.