Compound Interest Calculator
The most powerful force in personal finance, visualized. Enter your starting amount, rate, time and monthly contributions — watch compounding do the heavy lifting.
How it works
- Enter what you're starting with and the expected annual return.
- Pick how often interest compounds and how many years you'll stay invested.
- Add a monthly contribution — even small ones snowball into serious money over decades.
Worked example
$10,000 at 7% compounded monthly for 10 years with no contributions grows to $20,097 — doubling without adding a cent. Add $200/month and it reaches about $54,700: only $34,000 of that was your money — the other ~$20,700 is compounding.
The math behind it
Future value = P(1 + r/n)nt for the starting amount, plus each monthly contribution compounded for its remaining time. More frequent compounding (daily > monthly > yearly) squeezes out slightly more growth at the same rate — that's the difference between APR and APY.
Common mistakes
- Underestimating time — starting 10 years later can nearly halve the final amount.
- Chasing high returns while ignoring fees, which compound against you just as hard.
- Forgetting inflation eats roughly 2–3% of purchasing power per year.
- Cashing out early and resetting the compounding clock to zero.
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Frequently asked questions
What compounding frequency should I pick?
Match the account: savings accounts often compound daily, CDs vary, and many projections use monthly. The difference between frequencies is small compared to rate and time.
Why does starting early matter so much?
Compounding is exponential — money invested at 25 has 40 years to double and double again, while money at 35 has only 30. Time beats amount.
Is 7% a realistic return?
About 7% is the long-term average US stock market return before inflation — a common planning figure, not a promise. Savings accounts pay far less.
Does this account for taxes or inflation?
No — this shows nominal, pre-tax growth. Real purchasing power will be lower after inflation and taxes.
What's the difference between APR and APY?
APR is the nominal yearly rate; APY includes the effect of compounding, so APY is the number that tells you what you actually earn.