Compound Interest Calculator
See how your savings and investments grow over time with the power of compounding.
Year-by-Year Growth
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Request a ToolHow to Use the Compound Interest Calculator
This calculator shows you exactly how your money grows over time when you combine an initial deposit with regular monthly contributions and compound interest. Here is how to get started:
- Enter your initial deposit. This is the lump sum you are starting with. If you are starting from zero, just enter 0. Any amount works.
- Set a monthly contribution. This is the amount you plan to add every month. Even small, consistent contributions make a dramatic difference over long time periods. The default is $500/month.
- Choose an interest rate. Enter the annual rate of return you expect. For a broad stock market index fund, 7% (inflation-adjusted) is a commonly used long-term estimate. Savings accounts and bonds will be lower. Adjust to match your investment type.
- Set the time horizon. Enter the number of years you plan to invest. The longer the time period, the more powerful compounding becomes. Try comparing 10 years vs. 30 years to see the difference.
- Pick a compounding frequency. Monthly is the most common for savings accounts and investment returns. Daily compounding produces slightly higher returns. Annual compounding is common for bonds and CDs.
Results update instantly as you type. Use the Share button to send a pre-filled link to someone, or Copy to grab the result for a spreadsheet or message.
About Compound Interest
Compound interest is interest calculated on both the initial principal and the accumulated interest from previous periods. This is different from simple interest, which only applies to the original principal. With simple interest on $10,000 at 7%, you earn $700 every year, always. With compound interest, you earn $700 the first year, then $749 the second year (7% of $10,700), then $801.43 the third year, and so on. Each year the growth accelerates.
The effect is modest over short periods but becomes enormous over decades. The two biggest factors that amplify compounding are time and consistent contributions. Starting ten years earlier often matters more than doubling your monthly deposit. This calculator lets you experiment with different scenarios to see exactly how these variables interact.
All calculations run entirely in your browser. We never see or store your financial data.
Frequently Asked Questions
What is compound interest?
Compound interest is interest earned on both your original deposit and on previously earned interest. Over time, this creates exponential growth rather than linear growth. For example, $10,000 at 7% compounded annually becomes $10,700 after year one, $11,449 after year two, and $76,123 after 30 years, without any additional contributions.
How often should interest compound?
More frequent compounding produces slightly higher returns. Daily compounding earns a bit more than monthly, which earns more than quarterly or annually. In practice, the difference between daily and monthly compounding is small. For savings accounts, monthly or daily is typical. For investments like index funds, returns compound continuously based on market performance, which this calculator approximates using the frequency you select.
What is a realistic rate of return?
It depends on the investment. High-yield savings accounts currently offer 4-5%. The S&P 500 has averaged roughly 10% nominal (about 7% after inflation) over the past century. Bonds and CDs typically return 3-6%. A blended portfolio might target 6-8%. Use a conservative estimate for financial planning, and remember that past performance does not guarantee future results.
How does monthly contribution affect growth?
Monthly contributions have a massive impact, especially over long periods. For example, $10,000 invested at 7% for 30 years grows to about $76,000 with no contributions. Add $500/month and the final balance jumps to over $600,000. The contributions themselves total $190,000, but compounding turns that into far more. Consistent investing over time is the most reliable way to build wealth.