Compound Interest Calculator.

Guide

How to use the Compound Interest Calculator

1. Enter the Starting amount: what is in the account today, or the lump sum you are about to deposit. Enter 0 if you are starting from scratch.
2. Enter the Monthly contribution you plan to add. The calculator deposits it at the end of every month, after that month's interest is credited.
3. Enter the Annual interest rate as the nominal yearly rate. For a savings account or CD that is the stated rate, not the APY. For an investment, use the average yearly return you expect.
4. Choose the Compounding frequency. Many bank accounts compound daily or monthly. Pick what the account actually does, or leave it on Monthly if you are modeling a return rather than a bank rate.
5. Set Years to grow. Try your real horizon first, then ten years longer, to see what time alone does.
6. Read the Future value headline, then the split between Total contributions and Total interest earned. The year-by-year table shows when interest starts outrunning your deposits.

How the math works

Simple interest pays you on your original deposit only. Compound interest pays you on the deposit plus every bit of interest already credited. That interest-on-interest is small at first and enormous later, which is why the balance line on the chart bends upward instead of running straight.

The calculator works month by month. It multiplies the balance by a growth factor that depends on the rate and how often the account compounds, then adds your contribution. Deposits made this month do not earn interest until next month.

Compounding frequency sets the size of that growth factor. Daily compounding credits a tiny amount every day, so interest starts earning interest sooner. The gap between daily and monthly is small; the gap between monthly and annual is noticeable over twenty years, but still far less than one extra percentage point of rate.

Worked example

Start with $10,000, add $200 a month, earn 7% compounded monthly, for 20 years.

With monthly compounding, n is 12, so the monthly growth factor is (1 + 0.07 ÷ 12)^(12 ÷ 12) = 1.005833. That is 0.5833% a month.

Month 1: 10,000 × 1.005833 = $10,058.33, plus the $200 deposit, for $10,258.33. The first month earned $58.33. Month 2: 10,258.33 × 1.005833 + 200 = $10,518.17, with $59.84 of interest, a little more because the balance was a little bigger. Month 3 ends at $10,779.53.

Keep going for 240 months and the account reaches $144,572.72. You put in $10,000 plus 240 × $200 = $58,000. The other $86,572.72 is interest: roughly 60 cents of every dollar in the account was never deposited by you.

End of year	Balance	Your contributions	Interest earned
1	$13,201.42	$12,400	$801.42
5	$28,494.83	$22,000	$6,494.83
10	$54,713.58	$34,000	$20,713.58
15	$91,881.93	$46,000	$45,881.93
20	$144,572.72	$58,000	$86,572.72

Read the last column top to bottom. The first ten years earned $20,713.58 of interest. The second ten years earned $65,859.15, more than three times as much, on the same $200 a month. In year 1 the account earned $801.42; in year 20 alone it earned $9,658.02, about twelve times as much.

Switch the Compounding frequency to Annually and the same inputs end at $140,204.12, a $4,368.60 difference over two decades. Switch to Daily and it ends at $144,982.48, only $409.76 more than monthly.

What moves the result most

Time first, rate second, contribution amount third, compounding frequency a distant fourth. Here is the example account with one input changed at a time.

• Ten more years. Run it to 30 years and the balance is $325,159.17. The extra decade adds $180,586.45 while you add only $24,000 more in deposits.
• Ten fewer years. Stop at 10 years and you have $54,713.58. Half the time produces well under half the money.
• One point of rate. At 6% instead of 7% the 20-year result is $125,510.22, a $19,062.50 haircut, which is roughly what a 1% annual fee costs you here. At 10% it is $225,154.50.
• $100 more a month. Contributing $300 instead of $200 ends at $196,665.39. The extra $24,000 of deposits turned into an extra $52,092.67.
• No contributions at all. The $10,000 alone grows to $40,387.39, about four times what went in. The $200 a month alone, from zero, grows to $104,185.33, a little over twice the $48,000 deposited. Each dollar works harder the earlier it goes in, but the steady deposits build the bigger pile.

Common mistakes

Entering an APY in the Annual interest rate field. APY already includes compounding: a 7% nominal rate compounded monthly is a 7.23% APY, so typing 7.23 with monthly compounding double-counts. Use the nominal rate, or enter the APY and set Compounding frequency to Annually. The Effective annual rate line in the results shows the APY for whatever rate and frequency you entered.

Forgetting inflation. $144,572.72 in twenty years buys less than it does today. For a today's-dollars view, run the calculator with the rate minus your inflation guess, or use the Retirement Calculator, which handles inflation separately.

Treating an investment return as a guarantee. A savings rate is contractual; a 7% market return is a long-run average with bad years mixed in. The calculator draws a smooth curve and real accounts do not.

Giving up early because the first years look boring. In the example, year 1 earned $801.42 on $12,400 of deposits. The curve looks flat for a decade and then it does not. The math rewards the people still there in year 15.

Where interest works against you, the Loan Calculator and Credit Card Payoff Calculator use the same monthly-rate idea. The ROI Calculator turns a start and end value into an annualized rate so you can compare an investment you already own against the rates here.

What this calculator doesn't do

It assumes one fixed rate for the whole period, contributions that never change, no withdrawals, no fees and no taxes. Interest in a taxable account is usually taxed in the year it is earned, which lowers the effective rate; investment returns vary year to year; and most people raise their contributions over time. Treat the result as a clean projection of a steady plan, not a forecast.

Results are estimates. Your bank's or brokerage's statements, with their exact crediting dates and day counts, are the figures that govern.

Frequently asked questions

Estimates for planning only. Your lender, dealer or tax authority sets the real numbers, and rates, fees and rules change. This is not financial, tax or legal advice. Nothing you type here leaves your browser. See the terms of use.