Compound Interest Calculator
See how an initial deposit and regular contributions grow over time when interest compounds.
How this calculator works
This calculator compounds interest monthly and adds your recurring contribution each period, which is how most savings and investment accounts actually work.
A = future value · P = principal · r = annual rate · n = compounding periods per year · t = years
Why compounding matters
Compound interest earns returns on your returns, not just your original deposit — which is why the growth curve accelerates the longer money stays invested.
Regular contributions amplify this effect: each new deposit starts compounding immediately, so consistency often matters more than the size of your initial deposit.
The power of starting early
Because compound growth accelerates over time, the same monthly contribution produces dramatically different results depending on when you start. $300/month at 7% for 30 years grows to roughly $340,000, while the same contribution for just 20 years grows to only about $147,000 — a 10-year head start more than doubles the result.
This is why the biggest lever in long-term compounding usually isn't the contribution amount or even the rate — it's time. Starting a few years earlier often outweighs contributing significantly more later.
A worked example
Starting with $8,000 and adding $250/month at 7% annual return for 15 years: the balance grows to roughly $92,300. Of that, about $53,000 came from contributions (the $8,000 start plus $45,000 in deposits) and around $39,300 came purely from compound growth.
Extend the same scenario to 25 years instead of 15, and the balance grows to roughly $216,000 — more than double — even though total contributions only grew by about $30,000, illustrating how much of long-term growth comes from time rather than added deposits.
The power of starting early
Because compound interest earns returns on previous returns, the timing of contributions matters more than most people expect. $200 invested monthly starting at age 25 can grow to significantly more by retirement than the same $200 monthly starting at age 35, even though the later investor contributes for a similar total amount — simply because the earlier money has more time to compound.
This is often summarized by the 'Rule of 72': dividing 72 by your annual return rate gives a rough estimate of how many years it takes for an investment to double. At 6% annual growth, that's roughly 12 years to double — a useful mental shortcut for gauging long-term growth. To model recurring contributions across a full portfolio, see the Investment Calculator.
Frequently asked questions
What's the difference between simple and compound interest?
Simple interest is calculated only on the original principal. Compound interest is calculated on the principal plus any interest already earned, so it grows faster over time.
How often should interest compound for the best results?
More frequent compounding (daily or monthly) produces slightly higher returns than annual compounding at the same nominal rate, though the difference is usually small.
How often should interest compound for best results?
More frequent compounding (daily or monthly) produces marginally higher returns than annual compounding at the same nominal rate, though the practical difference is usually small over long periods.
What's a realistic compound growth rate to assume?
Historical long-term stock market averages run around 7-10% before inflation, though returns vary significantly year to year and aren't guaranteed.
Does this calculator account for taxes?
No — this shows gross growth. Taxable accounts may owe tax on gains, while tax-advantaged accounts like 401(k)s or IRAs can grow without annual tax drag.
Does compounding frequency matter much?
It matters less than people often assume — the difference between monthly and daily compounding at the same nominal rate is usually small, while the interest rate itself and time invested matter far more.
What is the Rule of 72?
A quick mental shortcut: divide 72 by your annual growth rate to estimate how many years it takes an investment to double. At 8% growth, that's about 9 years.