Compound Interest Calculator
See how your money grows over time with compound interest. Enter your starting amount, monthly contributions, interest rate, and time horizon to visualize your wealth-building journey.
How This Calculator Works
This calculator simulates your balance month by month. Each month, your balance earns one month of growth (your annual rate ÷ 12), then your monthly contribution is added. Repeat for your full time horizon and you get the curve above — slow at first, then steep. That bend in the curve is compounding doing its thing.
FV = P × (1 + r/12)^n + PMT × [((1 + r/12)^n − 1) ÷ (r/12)]P is your starting principal, PMT is your monthly contribution, r is your annual return as a decimal, and n is the total number of months. The first term is your starting money growing on its own; the second is what your monthly contributions grow into.
Assumptions baked into the math
- Interest compounds monthly, which is standard for most investment and savings accounts.
- Contributions are added at the end of each month, after that month’s growth.
- Your rate of return is constant every year. Real markets bounce around — treat the output as a trajectory, not a promise.
- Results are pre-tax and don’t account for inflation or fees. For an inflation-adjusted picture, use a real return (e.g. 7% instead of 10%).
A worked example
Start with $10,000 and add $500/month at a 7% annual return for 20 years. You put in $130,000 of your own money; compound growth adds another $170,851, for a final balance of about $300,851. More than half the ending balance is growth, not contributions — and the split keeps tilting toward growth the longer you stay in.
Frequently Asked Questions
What is compound interest?
Compound interest is interest earned on both your original principal and on the interest that has already been added to your balance. Unlike simple interest (which only applies to the principal), compound interest accelerates your growth because your earnings generate their own earnings over time.
How much will $10,000 grow in 20 years?
At a 7% annual return compounded monthly, $10,000 grows to approximately $40,387 in 20 years — without adding a single dollar. If you also contribute $500/month, that total jumps to roughly $301,000. The key variables are your rate of return, how long you invest, and how consistently you add to it.
What is a realistic rate of return to use?
The S&P 500 has historically returned about 10% annually before inflation, or roughly 7% after inflation. For conservative estimates, use 6-7%. For aggressive growth portfolios, 8-10% is reasonable. Alternative investments like real estate crowdfunding or private credit may offer different return profiles.
How often should interest compound?
Most savings accounts and investment returns compound daily or monthly. The more frequently interest compounds, the faster your money grows — though the difference between daily and monthly compounding is small. This calculator uses monthly compounding, which is standard for most investment accounts.
What is the Rule of 72?
The Rule of 72 is a quick way to estimate how long it takes to double your money. Divide 72 by your annual return rate: at 7% growth, your money doubles in roughly 10.3 years (72 ÷ 7). At 10%, it doubles in about 7.2 years.
Does this calculator account for taxes?
This calculator shows pre-tax growth. In tax-advantaged accounts (Roth IRA, 401k), your actual growth will match these numbers closely. In taxable accounts, capital gains taxes will reduce your effective return. For a more precise picture, subtract 1-2% from your expected return rate.