Compound Interest Calculator
See how your savings grow over time as interest compounds — with regular monthly contributions, a year-by-year breakdown, and total interest earned.
Final Balance
How It Works
Compound interest means you earn interest not just on your original deposit, but on all the interest you have already earned. The formula is A = P(1 + r/n)nt + PMT × ((1 + r/n)nt − 1) / (r/n), where P is your initial deposit, r is the annual rate, n is how many times per year interest compounds, t is the number of years, and PMT is your regular contribution. The first part grows your starting lump sum; the second part grows your stream of contributions.
Two things matter most: time and consistency. Because growth is exponential, the last few years of a long savings plan add far more than the first few. Regular monthly contributions also help enormously — even modest ones — because every dollar you add starts earning interest of its own. Compounding more often (monthly instead of annually) gives a small extra boost, since interest starts earning interest sooner.
Worked example: start with $10,000, add $200 every month, and earn 7% a year compounded monthly for 20 years. Your total contributions come to $10,000 + ($200 × 240 months) = $58,000. Compounding turns that into a final balance of about $144,573 — roughly $86,573 of it pure interest. Without the monthly contributions, the $10,000 alone would grow to only about $40,387, which shows how much regular saving matters.
Frequently Asked Questions
What is the difference between simple and compound interest?
Simple interest is paid only on your original deposit. Compound interest is paid on your deposit plus all previously earned interest, so your balance grows faster and faster over time.
Does compounding frequency matter much?
A little. Monthly compounding beats annual compounding by a small amount at the same rate, because interest starts earning interest sooner. The rate and the time horizon matter far more than the frequency.
Why do the later years grow so much faster?
Because the balance is larger, the same percentage rate produces more dollars of interest each year. In the worked example above, the account earns more interest in the final year alone than it earned in the entire first five years combined.
Does this calculator account for taxes or fees?
No. Taxes on interest and account fees would reduce your real return. Use the rate you expect after fees, and remember that investment returns are never guaranteed.
What rate should I use?
Use a rate that matches the account or investment you have in mind — a savings account rate for cash, or a long-term average return for investments. Try a lower, conservative rate too, so you can see a realistic range of outcomes.
Last updated: November 2026