Compound Interest Calculator
See what a starting balance plus steady monthly contributions grows into, and how much of the final number is interest earning interest.
Balance vs. contributions over time
Compound interest means each period's growth is calculated on the balance including all previous growth. The formula for a starting balance P at monthly rate i over n months is P(1+i)ⁿ, and each monthly contribution C adds C[((1+i)ⁿ−1)/i]. This calculator compounds monthly and adds contributions at the end of each month, the standard convention used by most banks and brokerages.
Worked example: $10,000 invested at 7% with $500 added monthly becomes about $300,900 after 20 years. Only $130,000 of that is money you put in; the other $170,900 is growth. Stretch the same inputs to 30 years and the balance reaches roughly $691,000, more than double the 20-year figure on just $60,000 of additional contributions. Time is the most powerful input in the formula.
Frequently asked questions
How often does this calculator compound?
Monthly, with contributions added at the end of each month. Annual compounding produces slightly lower results; daily compounding slightly higher. The difference between monthly and daily compounding at 7% is only about 0.02% per year.
What annual return should I assume?
The S&P 500 has historically averaged around 10% per year before inflation and roughly 7% after inflation over long periods. High-yield savings accounts follow prevailing interest rates. Past performance never guarantees future results, try a range of rates to see best and worst cases.
Does the calculation account for taxes or inflation?
No, results are pre-tax, nominal dollars. In tax-advantaged accounts like a 401(k) or IRA the pre-tax figure is realistic; in taxable accounts, dividends and realized gains are taxed along the way. Subtract about 3% from your return assumption to think in today's purchasing power.
Why is starting early so powerful?
Because compounding is exponential, the final years produce the largest dollar gains, but only if the early years happened. $500/month at 7% from age 25 to 65 grows to about $1,312,000; starting at 35 produces about $610,000. The ten-year head start more than doubles the outcome on only $60,000 of extra contributions.
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Calculators model hypothetical outcomes from the inputs you provide. They are informational only, not financial, investment, tax, or legal advice.