Compound Interest Calculator
See the power of compounding over time.
How this calculator works
Formula
FV = P(1 + r/n)^(nt) + PMT · ((1+i)^(nt) − 1)/i
Method
Combines the future value of a lump sum with the future value of a monthly contribution series.
Example
$10,000 with $200/month at 7% for 20 years grows to roughly $137,000.
The complete guide to the Compound Interest Calculator
Compound interest is the single most important idea in personal finance. This calculator shows exactly how your money grows when interest itself starts earning interest — and how much monthly contributions and time change the final number.
The formula
FV = P(1 + r/n)^(nt) + PMT · ((1+i)^(nt) − 1)/i. P is the starting principal, r the annual rate, n the compounding periods per year, t the number of years, PMT the periodic contribution, and i the periodic rate. The tool handles all of it.
Why time dominates every other input
Because the exponent is time. $10,000 at 8% doubles in about 9 years, quadruples in 18, and 8× in 27. Every extra decade multiplies rather than adds.
Contributions turn a small principal into a large balance
Add $300 monthly to that same $10,000 and after 30 years you have about $440,000. You contributed roughly $118,000. The other $322,000 is pure compounding — no extra effort required.
How compounding frequency changes things
Daily compounding beats monthly beats annual — but the gap is small at reasonable rates. At 7% annual, daily compounding produces 7.25% effective, monthly 7.23%, annual 7.00%. Frequency matters more at high rates.
Realistic expectations for returns
U.S. stock returns have averaged about 7% after inflation over long periods. Bonds around 2–3%. Cash roughly 0%. Model with the number that matches the account type you're planning.
The cost of waiting to start
Starting at 25 with $300/month at 7% produces about $750,000 by 65. Starting at 35 produces about $360,000. Same effort, half the outcome — that's a decade of compounding you can never recover.
How to use this calculator
Enter starting principal, monthly contribution, annual return, and horizon. The result updates live. Test 'what if I add $50 more per month' — it's usually a bigger lever than you expect.
Frequently asked questions
What rate should I use?
For long-term stock investments, 6–8% is defensible after inflation. Use the account's real quoted APY for savings.
Are these numbers guaranteed?
No. Historical averages aren't promises. Use conservative inputs when planning.
Does the tool account for taxes?
No. It shows gross growth. Adjust returns downward for taxable accounts.