Compound Interest Calculator
Find out how your savings grow when interest compounds over time. Enter your starting balance, expected return, and monthly contributions — the calculator projects your future balance, adjusts for inflation into today's dollars, compares lump-sum vs. monthly strategies, and draws a year-by-year growth chart. Everything runs in your browser; nothing is uploaded.
Year-end balance. Contributions are added monthly; interest compounds at the selected frequency.
Assumes a fixed annual rate, end-of-month contributions, and no taxes, fees, or withdrawals. This calculator is for educational purposes only and does not constitute financial advice. Past performance is not indicative of future results. Consult a qualified financial advisor before making decisions.
How to use this calculator
- Initial investment — the lump sum you start with today. Enter 0 if you are starting from scratch.
- Annual interest rate — your expected yearly return. A diversified stock portfolio has historically returned around 7% per year after inflation, but past performance never guarantees future results.
- Years to grow — how long the money stays invested. Time is the most powerful input: doubling the years more than doubles the result.
- Compound frequency — how often interest is added to the balance. Monthly and daily compounding beat annual compounding slightly; the difference is small compared to the rate and the time horizon.
- Monthly contribution — an optional recurring deposit, added at the end of each month.
- Show values in today's dollars — divides the future balance by cumulative inflation, so you see what the money would be worth in current purchasing power. A $325,000 balance in 30 years at 3% inflation spends like about $134,000 today.
- Compare scenarios — shows your plan side by side with "lump sum only" (just the initial investment, no monthly deposits) and "monthly only" (no starting balance, only the monthly habit).
The formula behind it
The future value A of an initial principal P at annual rate r, compounded n times per year for t years, is:
A = P × (1 + r/n)nt
Monthly contributions are converted to an effective monthly rate i = (1 + r/n)n/12 − 1 and added as an ordinary annuity: PMT × (((1 + i)N − 1) / i), where N is the total number of months.
The inflation-adjusted ("today's dollars") value is Real = FV ÷ (1 + inflation)t.
Want the full story? Read our guides: The Power of Compound Interest and Compound vs. Simple Interest.
Frequently asked questions
What is compound interest?
Compound interest is interest calculated on both your original principal and on interest you have already earned. Each compounding period, your balance grows a little, and the next period's interest is calculated on that larger balance — which is why growth accelerates over time.
What is the difference between APR and APY?
APR (Annual Percentage Rate) is the nominal yearly rate before compounding is taken into account. APY (Annual Percentage Yield) includes the effect of compounding, so it is the number that tells you how much your money actually grows in a year. More frequent compounding means a higher APY for the same APR.
How do monthly contributions affect compound growth?
Monthly contributions have a large effect because every deposit starts compounding on its own. In many scenarios, regular contributions matter more than chasing a slightly higher interest rate — consistency beats timing.
How does compounding frequency affect my results?
More frequent compounding raises your effective yearly growth slightly. A 7% rate compounded monthly grows to about 7.23% per year, while annual compounding gives exactly 7%. The difference is small — the rate itself and the number of years matter far more.
Why does starting early matter so much?
Because time sits in the exponent of the compound interest formula. Contributing $200 a month at a 7% return for 30 years turns about $72,000 of contributions into roughly $244,000. Ten extra years of the same habit more than doubles the result — early dollars have the most time to compound.
Does this calculator include taxes and fees?
No. This calculator shows pre-tax, pre-fee growth so you can compare scenarios cleanly. Real investment accounts may owe taxes on gains and charge management fees, which reduce the final balance.