📈 Compound Interest Calculator
See how an initial amount plus steady monthly contributions snowball over time — and exactly how much of your final balance is your own money versus interest earned.
Why compounding feels like magic
Compound interest is interest earned on your interest. Early on it's barely noticeable; given enough time it dominates. The reason is that your balance grows exponentially: each period's growth is calculated on a larger base than the last. The two most powerful inputs are time and rate — far more than the size of any single contribution.
The cost of waiting
Because growth is exponential, the years at the end matter most — which is exactly why starting early beats contributing more later. Someone who invests for 40 years often ends up ahead of someone who invests twice as much per month but starts 10 years later. Try it above: lower the monthly amount but add years, and watch the final balance.
Reading the result honestly
- Total contributions is the money you actually put in.
- Interest earned is everything above that — the part compounding created for you.
- Real vs. nominal: a 7% return with 3% inflation is closer to 4% in today's purchasing power. Use a lower rate if you want an inflation-adjusted picture.
- Returns aren't smooth in real life. This shows the average path, not the bumps along the way.
Frequently asked questions
What return rate should I use?
For a diversified stock portfolio, many people model 6–7% as a long-run average. High-yield savings and CDs are usually 1–5% and change often. Use a rate that matches where the money will actually sit, and consider subtracting inflation for a 'real' view.
Does compounding frequency matter much?
A little. Daily vs. monthly compounding at the same annual rate makes only a small difference over long periods. The rate itself, your contribution, and the number of years matter far more.
Are contributions added before or after interest?
This calculator adds your contribution each month and then applies growth for the period, which mirrors how most automatic investment plans work. It's a close, slightly conservative estimate.
Is this guaranteed?
No. Real investment returns vary year to year and can be negative. The calculator shows the smooth average path so you can compare scenarios; treat the output as a planning estimate, not a promise.
These calculators provide general estimates for educational purposes and do not constitute financial, tax, or legal advice. Figures are approximate; verify with a qualified professional and your lender before making decisions.