Investing
Compound interest calculator
Enter a starting balance, monthly contribution and expected annual return to see how compounding builds wealth year by year.
Some inputs need attention. The results below are from your last valid entries.
Assumptions
Returns are assumed constant and are not guaranteed. Real markets fluctuate; taxes and fees are not included.
Balance growth over time
| Year | Contributed | Interest | Balance |
|---|---|---|---|
| 1 | $16,000 | $919.19 | $16,919 |
| 2 | $22,000 | $2,339 | $24,339 |
| 3 | $28,000 | $4,294 | $32,294 |
| 4 | $34,000 | $6,825 | $40,825 |
| 5 | $40,000 | $9,973 | $49,973 |
| 6 | $46,000 | $13,782 | $59,782 |
| 7 | $52,000 | $18,299 | $70,299 |
| 8 | $58,000 | $23,578 | $81,578 |
| 9 | $64,000 | $29,671 | $93,671 |
| 10 | $70,000 | $36,639 | $106,639 |
| 11 | $76,000 | $44,544 | $120,544 |
| 12 | $82,000 | $53,455 | $135,455 |
| 13 | $88,000 | $63,443 | $151,443 |
| 14 | $94,000 | $74,587 | $168,587 |
| 15 | $100,000 | $86,971 | $186,971 |
| 16 | $106,000 | $100,683 | $206,683 |
| 17 | $112,000 | $115,820 | $227,820 |
| 18 | $118,000 | $132,486 | $250,486 |
| 19 | $124,000 | $150,790 | $274,790 |
| 20 | $130,000 | $170,851 | $300,851 |
| 21 | $136,000 | $192,796 | $328,796 |
| 22 | $142,000 | $216,760 | $358,760 |
| 23 | $148,000 | $242,892 | $390,892 |
| 24 | $154,000 | $271,345 | $425,345 |
| 25 | $160,000 | $302,290 | $462,290 |
How compound interest works
Compound interest means you earn interest on your interest. Each period, the balance grows by the periodic rate and your new contribution is added, so growth accelerates the longer you stay invested.
The classic formula for a lump sum is A = P(1 + r/n)^(nt), where P is the principal, r the annual rate, n the compounding periods per year and t the number of years. This calculator also adds your monthly contributions at the end of each month.
Methodology
The rate you enter is a nominal annual rate compounded at the frequency you select, so the equivalent monthly growth factor is (1 + r/n)^(n/12). Each month the balance is multiplied by that factor and your contribution is added at month end. Results are nominal (not adjusted for inflation), and the interest share shows n/a when no interest is earned.
Why time beats everything else
Try changing “Years to grow” from 25 to 35 and watch the interest share jump. Starting ten years earlier usually matters more than contributing a bit more each month, because early money has the longest runway to compound.
Tips for realistic results
- Use a conservative return. Lower the rate by 1–2 points to see a cautious case.
- Subtract inflation (roughly 2–3% a year in the US in recent decades) to think in today's purchasing power. Our inflation calculator helps.
- Fees matter. A 1% annual fund fee can cost tens of thousands over decades.
Frequently asked questions
What is a realistic rate of return?
Broad US stock indexes have historically returned roughly 10% a year nominal (before inflation), or about 7% after inflation, over long periods. That is not guaranteed, and individual years vary widely. Savings accounts and bonds typically return less with lower risk.
Does compounding frequency matter much?
Only slightly. Moving from annual to daily compounding at 7% raises the effective annual yield from 7.00% to about 7.25%. The rate and time horizon matter far more.
Are taxes included?
No. Taxes on dividends, interest and capital gains depend on your account type and jurisdiction. Tax-advantaged accounts like IRAs and 401(k)s can improve after-tax results.
This calculator is for education and illustration. It does not account for taxes, fees or your personal situation unless stated, and is not financial advice.
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