Compound Interest Calculator
This free compound interest calculator shows how your savings and investments grow over time. Compound interest means you earn returns on your returns — creating exponential growth that accelerates the longer your money stays invested. Unlike simple interest (which only earns on your original deposit), compounding turns time into your most powerful asset.
Whether you're planning for retirement, comparing savings accounts, or deciding how much to invest each month — this calculator gives you a clear picture of your financial future. It works for savings accounts, index funds, bonds, or any investment that generates recurring returns.
At 7% annual return, your money roughly doubles every 10.3 years (Rule of 72: 72 ÷ 7 ≈ 10.3). Starting with $10,000 and adding $500/month, you'd have ~$$301,000 after 20 years —$170,851 of that is pure compound growth.
Formula: A = P(1 + r/n)nt + PMT × [((1 + r/n)nt - 1) / (r/n)], where P = $10,000, r = 7.0%, n = 12, t = 20 years
Your numbers
Lump sum you're starting with today
Automate this — consistency beats timing
S&P 500: ~10% nominal, ~7% real (after inflation)
The most powerful variable. More time = exponentially more growth.
Results
Final Balance
$300,851
$130,000 contributed + $170,851 compound growth (56.8% of total)
Total Contributions
$130,000
Money you put in
Total Interest Earned
$170,851
Free money from compounding
Growth Multiple
2.3×
Every $1 became $2.31
Growth Over Time
Year-by-Year Breakdown
| Year | Balance | Contributions | Interest |
|---|---|---|---|
| 1 | $16,919 | $6,000 | $919 |
| 2 | $24,339 | $6,000 | $1,419 |
| 3 | $32,294 | $6,000 | $1,956 |
| 4 | $40,825 | $6,000 | $2,531 |
| 5 | $49,973 | $6,000 | $3,148 |
| 6 | $59,782 | $6,000 | $3,809 |
| 7 | $70,299 | $6,000 | $4,518 |
| 8 | $81,578 | $6,000 | $5,278 |
| 9 | $93,671 | $6,000 | $6,094 |
| 10 | $106,639 | $6,000 | $6,968 |
| 11 | $120,544 | $6,000 | $7,905 |
| 12 | $135,455 | $6,000 | $8,910 |
| 13 | $151,443 | $6,000 | $9,988 |
| 14 | $168,587 | $6,000 | $11,144 |
| 15 | $186,971 | $6,000 | $12,383 |
| 16 | $206,683 | $6,000 | $13,712 |
| 17 | $227,820 | $6,000 | $15,137 |
| 18 | $250,486 | $6,000 | $16,665 |
| 19 | $274,790 | $6,000 | $18,304 |
| 20 | $300,851 | $6,000 | $20,061 |
How to use this calculator
Initial investment — The lump sum you're starting with today. This could be existing savings, a bonus, or an inheritance. Even $0 works if you're starting from scratch and relying on monthly contributions alone.
Monthly contribution — The amount you add each month. Automating this (via payroll deduction or auto-transfer) removes the temptation to time the market. Consistency beats timing: investing $500 every month outperforms trying to buy the dip.
Annual return — Your expected yearly rate of return. For US stock market index funds, the historical average is ~10% nominal or ~7% real (after inflation). For high-yield savings accounts, use 4–5%. For bonds, use 4–6%. When in doubt, use 7% — it's a reasonable long-term real return for a diversified portfolio.
Time period — How long you plan to stay invested. This is the single most powerful variable in compounding. Going from 20 to 30 years doesn't give you 50% more — it can double or triple your final balance because the growth is exponential, not linear.
Real-world examples
Alice: The early saver who stopped at 35
Alice, 25, invests $500/month from age 25 to 35 — just 10 years — then stops completely. Total contributed: $60,000. At 7% annual return, her money compounds for 30 more years. By age 65, Alice has ~$602,000. She only put in $60K, but compounding did the rest.
Bob: The late saver who invested 3× more
Bob starts at 35 and invests $500/month for 30 years until age 65. Total contributed: $180,000 — three times what Alice put in. At 7%, Bob ends up with ~$567,000. Despite contributing $120K more, Bob ends up with less than Alice. That's the cost of waiting 10 years.
$100/month difference over 30 years
Investing $500/month vs $400/month — just $100 more — at 7% over 30 years: $500/month → ~$607K. $400/month → ~$485K. That extra $100/month ($36K total) generated an extra ~$122K in final balance. Small increases in contributions have outsized long-term effects.
Formula & Methodology
Compound interest formula (with regular contributions)
- A = Final amount
- P = Initial principal (your starting balance)
- r = Annual interest rate (decimal, e.g. 0.07 for 7%)
- n = Compounding frequency per year (12 = monthly)
- t = Time in years
- PMT = Monthly contribution amount
Assumptions & limitations
- Returns are assumed to be constant each year. Real markets fluctuate significantly.
- Contributions are made at the end of each compounding period.
- Taxes and fees are not included. Actual returns will be lower after expense ratios and taxes.
- Inflation is not factored into nominal projections. Use the inflation calculator to see purchasing power.
Data sources
- S&P 500 historical returns: ~10% nominal, ~7% real (1926–2024, S&P/CRSP data)
- High-yield savings rates: Federal Reserve H.15 series
- Rule of 72: mathematical approximation, exact doubling time = ln(2) / ln(1 + r)