About the Compound Interest Calculator
This compound interest calculator shows how a starting balance and regular monthly contributions grow when interest is added to the balance and then earns interest itself. Enter your initial deposit, how much you add each month, the annual rate, the number of years and the compounding frequency to see your final balance, the split between what you put in and what interest added, and a year-by-year schedule.
It works for savings accounts, CDs, money market funds and long-term investing, where the rate represents an assumed average annual return. It is useful for setting savings targets, showing the cost of starting late, or comparing how different rates change the outcome over 10, 20 or 40 years.
The calculation assumes a constant rate and that every contribution is made on time. Contributions are made at the end of each month unless you switch them to the start of the month; with quarterly or annual compounding, each deposit earns the equivalent compound rate for the part of the period it is invested.
With the default inputs, the future balance is $300,850.72. Change any value above to recalculate instantly.
How to use the compound interest calculator
- 1Enter your starting balance (use 0 if you are starting from scratch).
- 2Add how much you plan to contribute each month.
- 3Enter the annual interest rate or expected average return.
- 4Choose the number of years and the compounding frequency.
- 5Review the future balance and the chart to see how interest overtakes contributions.
Formula and method
The first term grows the initial deposit P at the nominal rate r compounded n times a year for t years. The second term is the future value of an annuity: 12 monthly contributions a year, each growing at the monthly equivalent rate i of the chosen compounding. When compounding is monthly, i is simply r ÷ 12.
If contributions are made at the start of each month, the annuity term is multiplied by (1 + i) because every deposit earns one extra month of interest. Total interest is the future balance minus everything you deposited. The effective annual rate, (1 + r/n)^n − 1, shows the true yearly growth after compounding.
- A
- Future balance
- P
- Initial deposit
- PMT
- Monthly contribution
- r
- Annual interest rate as a decimal
- n
- Compounding periods per year
- t
- Number of years
- i
- Equivalent monthly rate
Worked examples
$10,000 plus $500/month at 7% for 20 years
You deposit $10,000 up front plus $500 × 240 months = $130,000 in total. At 7% compounded monthly this grows to about $300,851, so interest contributes roughly $170,851 — more than you saved yourself.
One-time $5,000 at 5% compounded annually for 10 years
$5,000 × 1.05^10 = $8,144.47. Simple interest would have paid only $2,500; compounding adds another $644 because each year’s interest earns interest in later years.
$200/month from zero at 6% (daily) for 30 years
Saving $200 a month for 30 years means $72,000 in deposits. With 6% compounded daily (6.18% APY) the balance reaches about $201,462 — nearly 2.8 times what you put in.
Frequently asked questions
What is compound interest?+
Compound interest is interest calculated on your original deposit plus all interest already added to the account. Because the base keeps growing, the balance grows exponentially rather than in a straight line.
What is the compound interest formula?+
For a single deposit, A = P(1 + r/n)^(nt), where P is the principal, r the annual rate, n the compounding periods per year and t the years. Regular contributions add the future value of an annuity on top.
How often should interest compound?+
More frequent compounding earns slightly more, but the difference is small: at 5%, annual compounding yields 5.00% while daily yields 5.13%. The rate and the time invested matter much more than the compounding frequency.
What is the Rule of 72?+
Divide 72 by the annual interest rate to estimate how many years it takes money to double. At 6% it takes about 12 years; at 9% about 8 years. It is an approximation that works best for rates between 4% and 12%.
Should I use 7% or 10% for investment growth?+
Long-run US stock returns have averaged around 10% nominal, or roughly 7% after inflation. Using an inflation-adjusted rate like 5%–7% shows results in today’s dollars and keeps projections conservative.
Results are estimates for educational purposes and are not financial advice. Rates, fees and terms vary — confirm with your lender or a licensed advisor before making decisions.