Compound Interest Calculator
Adjust the inputs below. Results update as you type.
How it works
Compound interest grows a balance because each period earns return on both the original principal and previously credited interest. With regular contributions, the future value is the compounded starting balance plus the future value of an annuity at the same period rate. Enter a nominal annual rate and compounding frequency carefully—monthly compounding at 6% is not the same as 6% credited once per year. Real outcomes diverge for taxes, account fees, variable rates, and contribution gaps. Run a conservative rate case before treating a projection as a spending plan, and pair this page with savings, retirement, and inflation tools when the horizon is long.
Input guidance
- Starting principal should be money you can leave invested for the full horizon.
- Contribution frequency should match how you actually deposit.
- Expected return is an assumption—run a lower conservative case too.
The formula
A = P·(1 + r/n)^(n·t) for a lump sum, where P is principal, r the annual rate, n compounding periods per year, and t years. Add regular deposits with the annuity term PMT·(((1+i)^N − 1)/i).
Worked example
$10,000 at 7% compounded monthly for 20 years grows to about $40,400 — quadrupling without any extra deposits, purely from compounding.
More examples to test
- $5,000 start + $200/month for 10 years at 5% vs 7%: compare ending balances.
- Same contributions with annual vs monthly compounding: note the difference.
How to interpret results
Use the projection to set savings habits. Fees, taxes, and variable returns will change real results.
When this can be inaccurate
Does not fully model taxes, account fees, or sequence-of-returns risk for withdrawals.
Change history
- July 2026: Published compounding path with contribution and APY interpretation notes.
Site-wide corrections also appear on the corrections log.
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Frequently asked questions
Why is compound interest so powerful?+
Because you earn returns on your past returns, growth accelerates over time. The longer the horizon, the more dramatic the effect.
Does compounding frequency matter much?+
It helps a little — daily beats annual — but the rate and time horizon matter far more than how often interest is added.
What is the rule of 72?+
Divide 72 by the annual return to estimate the years to double your money. At 8%, money doubles in about 9 years.
Is a higher compounding frequency always better?+
More frequent compounding helps at the same nominal rate, but the quoted APY already embeds compounding—compare APYs when possible.
Can I spend based on this future balance?+
Not directly. Treat it as a planning range and keep a separate emergency fund for near-term needs.
Guided next steps
Want the full workflow? Use this calculator inside a step-by-step guide.
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