Finance
Compound interest calculator
See how a balance grows when interest compounds and you keep contributing. Adjust the numbers to watch the future balance — and the interest doing the work — change instantly.
- Future balance
- $95,718
- You contribute
- $49,000
- Interest earned
- $46,718
Assumes interest compounds monthly and contributions are made at the end of each month. Estimates only — actual returns vary.
Why compounding is the whole game
Compound interest means your interest earns interest. In year one you earn a return on your deposits; in year two you earn a return on your deposits and on year one’s interest, and so on. Early on the effect is quiet, but over decades the curve bends sharply upward — which is why starting early usually beats saving more later.
A worked example
Start with $1,000, add $200 a month at a 6% annual return, and after 20 years you’ll have contributed $49,000 but hold roughly $96,000 — the extra ~$47,000 is compound interest. Stretch the same plan to 30 years and the interest alone dwarfs everything you put in. Time, not timing, does the heavy lifting.
Learn the ideas behind the numbers
Understanding rates, risk, and why time matters turns a calculator result into a plan. Work through the Finance subject, or use the savings goal calculator to work backwards from a target.
Frequently asked questions
- What is compound interest?
- Compound interest is interest earned on both your original money and the interest it has already earned. Because each period’s interest joins the balance, growth accelerates over time — unlike simple interest, which is paid only on the original amount.
- How is compound interest calculated?
- For a lump sum, future value = principal × (1 + rate/n)^(n × years), where n is how many times a year interest compounds. When you also add regular contributions, each deposit compounds for the time remaining, so the tool sums the growth of the starting balance and every contribution.
- Does compounding frequency matter?
- Yes, but less than people expect. Compounding monthly instead of yearly raises the effective return slightly. The far bigger levers are the interest rate, how much you contribute, and — most of all — how many years the money stays invested.
- Is this calculator free and private?
- Yes. It runs entirely in your browser, nothing is sent anywhere, and there is no sign-up. Results are estimates for planning and assume a constant rate.