📈 Compound Interest Calculator

What this calculator does

Enter a starting amount, a yearly interest rate, a number of years, how often interest compounds and a monthly contribution. The calculator returns the final balance, the total you put in, the interest earned and the share of the final balance that came from interest. A year-by-year chart compares your balance with what you contributed. The sums run in your browser and nothing you type is sent anywhere.

The idea and the formula

With compound interest you earn interest on the interest you have already earned. For a single deposit with no further contributions, the balance is A = P × (1 + r ÷ n)^{n × t}, where P is the deposit, r the yearly rate, n the number of compounding periods per year and t the number of years. With monthly contributions, this calculator grows the balance one month at a time. Each month the balance is multiplied by (1 + r ÷ n)^{n ÷ 12} and your contribution is then added at the end of that month. For monthly compounding the monthly factor is simply 1 + r ÷ 12.

Worked examples

• One deposit. $10,000 at 5% for 10 years, compounded annually, becomes $10,000 × 1.05¹⁰ = $16,288.95. Compounded monthly it becomes $16,470.09.
• Deposit plus monthly savings. $5,000 at 7% for 20 years with $200 added every month, compounded monthly, ends at $124,379.03. You paid in $5,000 + 240 × $200 = $53,000, so $71,379.03 (57.4% of the final balance) is interest.
• Time beats size. At 7% with $300 a month and no starting amount, 20 years gives $156,278 on $72,000 contributed. Ten more years gives $365,991 on $108,000 contributed. The extra 50% in contributions produced more than double the result.

Does compounding frequency matter?

Less than people expect. Using the $5,000, 7%, 20-year, $200-a-month example:

• Annually: $120,855.70
• Quarterly: $123,707.21
• Monthly: $124,379.03
• Daily: $124,709.20

Going from monthly to daily adds only about $330 over 20 years. The rate and the number of years matter far more than the compounding frequency.

Rule of 72

A quick check: divide 72 by the yearly rate to estimate how many years it takes money to double. At 7% that is about 10.3 years. The exact answer is 10.24 years, so the shortcut is close for ordinary rates.

What the projection ignores

• Returns are not steady. A savings account may pay a fixed rate, but investments such as shares move up and down. A 7% average is not 7% every year, and the order of good and bad years affects the result.
• Inflation. At 7% growth and 3% inflation, your purchasing power grows by about 3.9% a year, not 7%.
• Fees and taxes. A 1% yearly fund fee on a 7% return takes a big share of the growth over decades. Tax treatment depends on the account and the country.
• Contribution timing. Contributions are assumed to arrive at the end of each month. Depositing at the start of the month would give a slightly higher result.
• Currency. The labels show dollars, but the sums work in any currency.

This is a projection, not a forecast or advice. For a loan, where the same maths works against you, see the loan calculator.