Compound Interest Calculator
See what a starting amount grows into with compound interest — add a monthly deposit if you like, choose how often interest compounds, and follow the balance year by year.
Nominal growth — taxes and inflation are not deducted.
Formula and calculation
Worked example
$10,000 at 7% compounded monthly, with $100 added each month for 10 years: the final balance is $37,405.09, of which $15,405.09 is interest — you contributed $22,000.00 yourself. The effective annual rate is 7.23%.
The rule of 72, and what it misses
The old shortcut says money doubles in about 72 ÷ rate years: 7% doubles in roughly 10 years. It's a decent mental estimate for a single lump sum, but it ignores additions — with $100-a-month deposits the balance roughly triples in that decade, because each deposit starts its own compounding clock. The longer the horizon, the more the last deposits look small and the earliest deposits look like the whole story; that gap is why starting early matters more than starting with more.
What the results mean
- Final balance
- The balance after the full term: your starting amount and deposits, plus all the interest they have earned.
- Total interest earned
- Everything the money earned — the final balance minus what you put in. This is the compounding at work.
- Total contributed
- Your own money: the starting amount plus all monthly deposits. Compare it with the final balance to see the interest share.
- Effective annual rate (APY)
- The effective annual rate — what the nominal rate compounds into over a year (7% monthly ≈ 7.23% APY). The number to use when comparing accounts.
Frequently asked questions
What is compound interest in simple terms?
Interest that earns interest. Your first year's interest joins the balance, and next year you earn on the interest too — so growth accelerates instead of staying linear. $10,000 at 7% earns $700 the first year but about $13,400 of total interest over 20 years.
How often should interest compound for the highest balance?
More often is always better, but with diminishing returns: the same 7% gives 7.00% annually, 7.23% monthly and 7.25% daily. The jump from annual to monthly matters more than everything beyond it.
What rate should I assume in the calculator?
For cash: your bank's actual rate (the APY row is the fair comparison). For long-term investing: a diversified portfolio has historically returned 7–10% per year before inflation, but real returns vary hugely by decade — treat any projection as a scenario, not a promise.
Does this account for taxes or inflation?
No — it shows nominal growth. Taxes (on interest or capital gains) and inflation reduce what the money actually buys. For purchasing power, use the inflation calculator or subtract 2–3% from the rate for a rough real-return view.