Compound Interest Calculator: See How Your Money Compounds
See how a starting deposit and steady monthly contributions snowball once interest begins earning interest of its own.
Adjust the inputs and select Calculate for a full breakdown.
Year-by-year growth schedule
Compare Common Scenarios
How the numbers shift across typical situations for this calculator:
| Scenario | Future value | Total contributions | Total interest earned |
|---|---|---|---|
| $5k start · $200/mo · 7% · 20yr | $124,379.03 | $53,000.00 | $71,379.03 |
| $1k start · $100/mo · 6% · 30yr | $106,474.08 | $37,000.00 | $69,474.08 |
| $10k start · $0/mo · 8% · 25yr | $73,401.76 | $10,000.00 | $63,401.76 |
| $0 start · $300/mo · 9% · 15yr | $113,521.73 | $54,000.00 | $59,521.73 |
How This Calculator Works
Enter what you start with, the annual rate the money earns, how long it stays invested, and any amount you add each month. The calculator compounds the balance monthly: every period earns interest, that interest is folded into the balance, and the next period earns interest on the larger total. The schedule below separates the cash you contributed from the interest those contributions generated.
The Formula
Future Value with Regular Contributions
P = starting amount, PMT = monthly contribution, r = monthly rate (annual ÷ 12), n = number of months
Worked Example
Start with $5,000, add $200 every month, and let it earn 7% a year for 20 years. You personally pay in $53,000, yet the balance reaches roughly $124,400 — which means about $71,400 of the total is interest the account earned on your behalf along the way.
Key Insight
Interest on interest is what makes compounding powerful, but it shows up late. Most of the growth in any compound interest projection lands in the final third of the timeline, so the cost of delaying the start is far larger than it first appears.
The Rule of 72: how long for money to double
A simple shortcut every saver should know: divide 72 by your annual return rate to get the years it takes for money to double. At 6%/year: 72/6 = 12 years to double. At 8%: 72/8 = 9 years. At 10%: 72/10 = 7.2 years. At 3%: 72/3 = 24 years.
This isn't exact mathematically — the precise number is ln(2)/ln(1+r) — but Rule of 72 is accurate within ~5% for rates between 4% and 15%. Beyond this range, use 70 or 76 as alternative numerators (the 'Rule of 70' is mathematically exact at zero interest).
Practical application: if you want $1M by 65 and you're 25 (40 years), you need money to double roughly 3-4 times — meaning either large early contributions OR a higher growth rate. At 8%, 40 years allows ~4.4 doublings — turning $50,000 into $1M+ with no further contributions. At 4%, only ~2.5 doublings — same $50,000 reaches just $240,000. The arithmetic explains why early-decade investing dominates.
Compounding frequency: daily vs monthly vs annual — how much it matters
Most savings products advertise an interest rate alongside a 'compounding frequency': annual, monthly, daily, or continuous. The frequency affects your real return — but less than most savers think.
Concrete comparison: $10,000 at 5% APR for 10 years. Annual compounding: $16,289. Quarterly: $16,436 (+0.9%). Monthly: $16,471 (+1.1%). Daily: $16,487 (+1.2%). Continuous: $16,487 (+1.2%). The gap between daily and continuous is essentially zero — the gap between annual and daily is just 1.2% over 10 years.
Banks often quote 'APY' (Annual Percentage Yield) which already accounts for compounding frequency. Two products quoting 5% APY are equivalent regardless of underlying frequency. Compare APYs, not APRs. The compounding-frequency math is mostly marketing — focus on the headline APY and the credit quality of the institution instead.
Starting early vs catching up later: the brutal arithmetic
The single most important number in personal finance: each year of compounding multiplies your wealth more than the previous year. Concrete example: two investors, both aim for $1M at 65, at 7% return.
Early investor: contributes $200/month from age 25 to 35 ($24,000 total), then stops contributing. By 65: ~$430,000. Late investor: contributes $200/month from 35 to 65 ($72,000 total — 3× as much). By 65: ~$240,000. The early investor wins by 80% despite contributing 1/3 as much money.
Mathematics: each dollar contributed at age 25 has 40 years to compound (multiplier ~15× at 7%). Each dollar contributed at 55 has 10 years (multiplier ~2×). The 7.5× compounding advantage of starting early is so enormous it dominates any 'I'll catch up later' strategy. Time is the dominant input to compound interest — start the contribution flow as early as possible, even at small amounts.
How $10,000 grows with different rates and time (annual compounding)
Future value of a one-time $10,000 investment at varying annual returns. No additional contributions. Shows the dramatic effect of small rate differences over decades.
| Rate | 10 years | 20 years | 30 years | 40 years |
|---|---|---|---|---|
| 3% | $13,439 | $18,061 | $24,273 | $32,620 |
| 5% | $16,289 | $26,533 | $43,219 | $70,400 |
| 7% | $19,672 | $38,697 | $76,123 | $149,745 |
| 10% | $25,937 | $67,275 | $174,494 | $452,593 |
| 12% | $31,058 | $96,463 | $299,599 | $930,510 |
The difference between 7% and 10% return over 40 years: 3× more money. Over 10 years: only 1.3× difference. Time amplifies rate differences dramatically. Real-world equity returns ~7% real (10% nominal minus 3% inflation) is a reasonable long-run assumption for diversified stock indexes.
Frequently Asked Questions
What is compound interest?
Compound interest is interest calculated on both your original money and the interest already added to it. Over time the interest-earning base keeps growing, so each period adds slightly more than the one before.
How is compound interest different from simple interest?
Simple interest is paid only on your original deposit, so a balance grows in a straight line. Compound interest is paid on the deposit plus all prior interest, so the balance curves upward and accelerates.
How often should interest compound?
This calculator compounds monthly, a common frequency for savings and investment accounts. More frequent compounding raises the result slightly, but the rate and the time horizon matter far more than the interval.
Does the calculator account for inflation?
No, the figures are nominal. To gauge real buying power, compare the result against the cited inflation benchmark and treat part of the growth as merely keeping pace with rising prices.
What rate should I enter?
Use a rate that matches where the money sits — a deposit rate for cash, or a long-run market return for invested funds. The default reflects the cited long-run market benchmark.
Can I rely on these projections?
Treat them as illustrations, not promises. Actual returns fluctuate year to year, and a steady average rate smooths over the ups and downs a real account would experience.
References & Authoritative Sources
- FRED — Federal Reserve Economic Data — Historical interest rates and inflation · consulted May 31, 2026 · Federal Reserve historical data — basis for long-run return assumptions
- FDIC — Federal Deposit Insurance Corporation — Compounding frequency and APY calculation · consulted May 31, 2026 · Federal regulator — APY vs APR definitions, compounding methodology
- Truth in Savings Act — 12 CFR Part 1030 (Regulation DD) — Statutory basis for APY disclosure · consulted May 31, 2026 · Federal regulation requiring banks to disclose APY for fair comparison
Related Calculators
Data Sources & Benchmarks
This calculator draws on 3 independent, dated sources. The starting values for annual return rate are taken from the benchmarks below and refresh whenever the snapshots are updated.
Methodology & Review
Projections use monthly compounding of a fixed starting balance and a constant monthly contribution. The model assumes a steady annual rate and does not deduct fees or taxes; real returns vary from one period to the next.
Written by Ugo Candido · Last updated May 17, 2026.