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Compound Interest Calculator

Calculate how your investments grow over time with compound interest. See total balance, earnings breakdown, and a visual growth chart.

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$
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20 years
1 year 10 20 30 40 50 years
Final Balance
$0
Total Contributed
$0
0% of total
Interest Earned
$0
0% of total

Growth Over Time

Contributions Interest

Yearly Breakdown

See how your investment grows each year

Year Balance Contributed Interest Year's Interest

About This Tool

Compound interest is the most powerful force in personal finance — your money earns interest, and then that interest earns interest, creating exponential growth over time. This calculator shows exactly how your investments will grow, breaking down how much comes from your contributions versus how much comes from compound interest. Enter your starting amount, monthly contributions, expected annual return, and time horizon. The calculator instantly shows your future balance, total contributions, and total interest earned. The interactive chart visualizes how your wealth grows year by year, with separate areas showing contributions vs. earnings — so you can see the "snowball effect" of compounding. Whether you're planning for retirement, saving for a house, or just curious about long-term investing, this tool helps you understand the real power of starting early and staying consistent. Even small monthly contributions can grow into significant wealth given enough time.

How to Use

1. Enter your initial investment (starting amount) 2. Set your monthly contribution (what you'll add each month) 3. Enter the expected annual interest rate (historical stock market average is ~7-10%) 4. Use the slider to set your time horizon (1-50 years) 5. Select compounding frequency (monthly is most common for investments) 6. View results: final balance, total contributed, total interest earned 7. Explore the chart to see growth over time 8. Check the yearly breakdown table for detailed projections

Formula

With regular contributions, the formula is: FV = P(1 + r/n)^(nt) + PMT × [((1 + r/n)^(nt) - 1) / (r/n)] Where: FV = Future Value (final balance) P = Principal (initial investment) r = Annual interest rate (decimal) n = Compounding frequency per year t = Time in years PMT = Regular payment (monthly contribution) Example: $10,000 initial + $500/month at 7% for 20 years = $10,000 × 1.07^20 + $500 × 12 × [(1.07^20 - 1) / 0.07] ≈ $38,697 + $260,464 = $299,161 Total contributed: $10,000 + ($500 × 12 × 20) = $130,000 Interest earned: $299,161 - $130,000 = $169,161

Frequently Asked Questions

What is compound interest?
Compound interest is interest calculated on both the initial principal and the accumulated interest from previous periods. Unlike simple interest (which only applies to the principal), compound interest creates exponential growth. $1,000 at 7% simple interest earns $70/year forever. With compound interest, year 1 earns $70, year 2 earns $74.90, year 3 earns $80.14, and so on — growing faster each year.
How much will $10,000 grow in 10 years?
At 7% annual return compounded monthly: $10,000 becomes $20,097 in 10 years — more than doubling. At 10%, it becomes $27,070. Add $200/month contributions, and at 7% you'll have $54,892 (only $34,000 contributed). The earlier you start, the more compound interest works in your favor.
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 6% it takes 12 years, at 8% it takes 9 years, at 10% it takes 7.2 years. It's an approximation but useful for mental math.
What interest rate should I use for projections?
Historical averages: S&P 500 stocks ~10% nominal (7% after inflation), bonds ~5%, savings accounts ~0.5-4%, real estate ~8-12%. For long-term planning, 7% (inflation-adjusted stock returns) is a reasonable conservative estimate. Use lower rates for bond-heavy portfolios, higher for aggressive growth.
How often should interest compound?
More frequent compounding means slightly higher returns. Daily vs. annual compounding on $10,000 at 10% for 10 years: daily = $27,179, annual = $25,937 — about $1,242 difference. Most savings accounts compound daily, investments like index funds effectively compound daily, and bonds may compound semi-annually.
Does this calculator account for inflation?
No, results are in nominal (future) dollars. To estimate real (today's) purchasing power, subtract 2-3% from your expected return. A 10% nominal return with 3% inflation is about 7% real return. For retirement planning, use inflation-adjusted returns for more realistic projections.
How much should I save monthly for retirement?
The standard advice is 15-20% of income including employer match. Starting at 25 with $500/month at 7% gives you ~$1.2 million by 65. Starting at 35 requires ~$1,000/month for the same result. Use this calculator to find the contribution level that meets your specific goal.

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