Savings · Investing

Compound Interest Calculator

See how an initial deposit plus regular contributions grows over time — with compounding from daily to annually and a year-by-year breakdown.

$
$

Added at the end of each month.

%

E.g. 4–5% for HYSA, ~7% for a stock-index long-term average.

Rule of 72

At 7%, money doubles roughly every 10 years.

Balance after 20 years

$144,573

Interest earned

$86,573

Total invested

$58,000

Growth multiple

2.49×

Growth year by year

Year 1Year 20
Initial deposit Contributions Interest earned

Where the final balance comes from

Total $144,573Total$144,573
  • Initial deposit
    6.9%
    $10,000
  • Contributions
    33.2%
    $48,000
  • Interest earned
    59.9%
    $86,573

Yearly schedule

YearContributedInterestBalance
5$22,000$6,495$28,495
10$34,000$20,714$54,714
15$46,000$45,882$91,882
20$58,000$86,573$144,573

Planning retirement savings? Try the 401(k) calculator or check what inflation does to those dollars with the US inflation calculator.

How to use this calculator

  • Enter your starting amount

    Type the amount you are investing or saving today — zero is fine if you are starting from scratch.

  • Add a monthly contribution

    Regular contributions usually end up mattering more than the starting amount.

  • Set the rate and time

    Use your account’s APY, or a long-term market average for investments, and how many years you’ll let it grow.

  • Read the breakdown

    The chart splits your final balance into deposits, contributions, and interest — and the table shows every year.

The three levers, and which one you underrate

Every compound growth projection is built from three inputs — how much goes in, what rate it earns, and how long it stays. People consistently obsess over the middle one, hunting for an extra half percent, while treating time as fixed. The math runs the other way: rate is the input you control least and time is the one that does the heaviest lifting, because compounding is back-loaded — most of the growth happens in the final years, wherever those years fall.

A worked example: $10,000 plus $200 a month

Dana invests a $10,000 inheritance, adds $200 a month, and assumes 7% — a common long-run planning figure for diversified stock investments. Over 20 years she puts in $58,000 ($10,000 up front, $48,000 in contributions) and the projection reaches $144,573. The interesting part is the composition: $86,573 of the final balance is growth — more than everything she deposited. And the back-loading is stark. If she stopped five years early, at year 15, she would have $91,882: the final five years add $52,691, of which only $12,000 is her own money. Years 1–5 of the same plan add barely a fifth of that.

Run her numbers at different rates and the sensitivity shows: $109,333 at 5%, $193,669 at 9%. That spread is why a projection should be a band, not a point — pick a pessimistic and an optimistic rate and plan against the low end.

Mental math that gets the shape right

  • Rule of 72 for doubling. 72 ÷ rate ≈ years to double. At 7%, money doubles roughly every 10 years — so a 40-year horizon means about four doublings of the starting balance, which is how $10,000 becomes a six-figure sum without any contributions at all.
  • Contributions compound less than principal. Each monthly deposit only grows from its own start date, so the average contributed dollar in a 20-year plan compounds for about 10 years. This is why doubling the timeline more than doubles the outcome, but doubling contributions merely doubles their part of it.
  • Frequency is a rounding error next to rate and time. Daily versus monthly compounding at the same nominal rate changes the outcome by well under 1% over a decade. Banks resolve this for you anyway: APY already includes the compounding frequency, which is why comparing accounts by APY is safe and comparing by nominal APR is not.

What to subtract before believing the number

The projection is nominal and gross. Three things stand between it and spendable money. Inflation is the certain one — at typical rates, prices roughly double over 20–25 years, so a distant balance buys about half what the number suggests; the inflation calculator converts any future figure into today’s dollars. Taxes are the account-dependent one: interest in ordinary savings is typically taxed every year (slowing the compounding itself), while retirement accounts defer or remove that drag — the same inputs produce genuinely different outcomes by account type. Fees are the silent one: an expense ratio works exactly like a negative return, compounding against you with the same back-loaded force.

Terms that look interchangeable but aren’t

  • APR vs APY.APR is the nominal rate before compounding; APY is what you actually earn after it. On loans the same distinction runs against you — a credit card’s daily compounding makes its effective rate higher than the quoted APR.
  • Simple vs compound interest.Simple interest pays only on principal, forever linear. Most real products compound; the big exception is certain bonds and short-term notes, which is why their quoted rates aren’t directly comparable.
  • Average return vs your return.A fund’s published average assumes a lump sum held throughout. With monthly contributions, your personal return depends on when each dollar arrived — money-weighted and time-weighted returns diverge whenever you add or withdraw along the way.

Good uses for this page

Size an emergency fund’s growth at a real APY, test whether a savings goal needs more monthly contribution or just more patience, or settle the classic “invest the windfall vs spread it out” question with two runs. For retirement specifically, the 401(k) calculator layers employer matching on top of the same compounding engine — usually the highest-return decision available before any rate shopping.

Compound Interest FAQ

What is compound interest?

Compound interest is interest earned on both your original money and on interest already earned. Each period the balance grows, so the next period’s interest is calculated on a larger amount — that is why growth accelerates over time.

How often should interest compound?

More frequent compounding grows money slightly faster at the same nominal rate: $10,000 at 5% for 10 years becomes $16,289 compounded annually vs $16,470 compounded monthly. The difference is real but small — the rate and time matter far more.

What is the Rule of 72?

Divide 72 by your annual return to estimate how many years it takes money to double. At 8%, money doubles roughly every 9 years; at 6%, every 12 years.

Does this calculator include taxes or inflation?

No — results are pre-tax, nominal returns. Interest in taxable accounts is usually taxed yearly, and inflation reduces buying power. Pair this with the inflation calculator to see results in today’s dollars.

Is 7% a realistic return assumption?

It is a common planning figure loosely based on long-run US stock market averages, but no savings account pays it and no market guarantees it. Use your account’s actual APY for cash savings, and for investments run the projection at a range (say 5–9%) rather than a single optimistic number.

Why do my contributions earn less than the starting balance?

Each contribution only compounds from the month it arrives. A dollar deposited in year 15 of a 20-year plan gets 5 years of growth; a dollar in the starting balance gets all 20. This is why starting earlier with less usually beats starting later with more.

Trust and methodology

Last reviewed: June 28, 2026

This calculator provides planning estimates based on the assumptions shown on this page.

Methodology
Auto-updated on Jun 28, 2026Data snapshot: Jun 28, 2026

Inputs used

  • Initial deposit, monthly contribution, annual nominal rate, years, compounding frequency (daily to annually)

Formula basis

  • A = P(1 + r/n)^(nt) for the lump sum, where n is compounds per year
  • Contributions are simulated month by month at the equivalent monthly rate (1 + r/n)^(n/12) − 1, added at month-end
  • Rule of 72 doubling estimate: 72 ÷ annual rate

Assumptions and limits

  • Constant rate for the whole period — real investment returns vary year to year
  • Nominal, pre-tax results; taxes and inflation are not deducted
  • Contributions are made at the end of each month

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