Compound Interest Calculator
See how savings and investments grow over time. Add an initial balance, an interest rate, a regular monthly or annual contribution, and any compounding frequency — then watch the year-by-year breakdown.
$10.0K
Added at the end of each month.
| Year | Starting Balance | Contributions | Interest | Ending Balance |
|---|---|---|---|---|
| 1 | $10,000 | $6,000 | $919 | $16,919 |
| 2 | $16,919 | $6,000 | $1,419 | $24,339 |
| 3 | $24,339 | $6,000 | $1,956 | $32,294 |
| 4 | $32,294 | $6,000 | $2,531 | $40,825 |
| 5 | $40,825 | $6,000 | $3,148 | $49,973 |
| 6 | $49,973 | $6,000 | $3,809 | $59,782 |
| 7 | $59,782 | $6,000 | $4,518 | $70,299 |
| 8 | $70,299 | $6,000 | $5,278 | $81,578 |
| 9 | $81,578 | $6,000 | $6,094 | $93,671 |
| 10 | $93,671 | $6,000 | $6,968 | $106,639 |
| 11 | $106,639 | $6,000 | $7,905 | $120,544 |
| 12 | $120,544 | $6,000 | $8,910 | $135,455 |
| 13 | $135,455 | $6,000 | $9,988 | $151,443 |
| 14 | $151,443 | $6,000 | $11,144 | $168,587 |
| 15 | $168,587 | $6,000 | $12,383 | $186,971 |
| 16 | $186,971 | $6,000 | $13,712 | $206,683 |
| 17 | $206,683 | $6,000 | $15,137 | $227,820 |
| 18 | $227,820 | $6,000 | $16,665 | $250,486 |
| 19 | $250,486 | $6,000 | $18,304 | $274,790 |
| 20 | $274,790 | $6,000 | $20,061 | $300,851 |
TL;DR
Compound interest is interest earning interest. Enter your starting amount, rate, and years above; add an optional monthly or annual contribution; and pick how often interest compounds. The calculator returns your final balance, total contributions, and total interest earned, plus a year-by-year table. A real example: $10,000 at 7% compounded monthly grows to about $40,387 in 20 years — with zero extra deposits. This tool shows pre-tax, pre-inflation growth only.
The formula this calculator uses
Compound interest grows your principal by a fixed percentage each period, then grows the new, larger balance the next period. The future value of a lump sum is:
- P — the initial principal
- r — the annual interest rate as a decimal (7% = 0.07)
- n — compounding periods per year (daily = 365, monthly = 12, quarterly = 4, semi-annually = 2, annually = 1)
- t — the number of years
If you also make regular deposits of PMT, m times a year, those contributions are valued with the future-value-of-an-annuity formula, using the periodic rate i = r/m over N = m×t periods:
The tool uses end-of-period contributions (an "ordinary annuity"). Your final balance is the principal's future value plus the contributions' future value, and total interest earned is final balance − principal − total contributions.
The Rule of 72: how fast does money double?
The Rule of 72 is a mental-math shortcut: divide 72 by your annual return to estimate the years it takes to double your money. It is an approximation — here it is checked against the exact figure (using annual compounding) so you can see how close it really is.
| Annual return | Rule of 72 estimate | Exact years to double |
|---|---|---|
| 2% | 36 years | 35.0 years |
| 4% | 18 years | 17.7 years |
| 6% | 12 years | 11.9 years |
| 8% | 9 years | 9.0 years |
| 9% | 8 years | 8.0 years |
| 10% | 7.2 years | 7.3 years |
| 12% | 6 years | 6.1 years |
The estimate is most accurate near 8% — that is where the rule was tuned. At very low or very high rates it drifts, but it is still close enough for back-of-the-envelope planning.
Does compounding frequency really matter?
More frequent compounding earns slightly more, because interest starts earning its own interest sooner. But the effect is smaller than most people expect. Here is the same $10,000 at 5% for 10 years, compounded at different frequencies:
| Compounding | Final balance | Extra vs. annual |
|---|---|---|
| Annually (n = 1) | $16,288.95 | — |
| Semi-annually (n = 2) | $16,386.16 | +$97.21 |
| Quarterly (n = 4) | $16,436.19 | +$147.24 |
| Monthly (n = 12) | $16,470.09 | +$181.14 |
| Daily (n = 365) | $16,486.65 | +$197.70 |
Daily vs. annual compounding adds about $198 over a decade here — roughly 2% more interest. This is why banks advertise APY (which bakes in compounding) rather than the bare interest rate: a 5% rate compounded daily has an APY of about 5.13%.
What $10,000 becomes at different rates
A single $10,000 lump sum, no extra deposits, compounded annually. This is the clearest way to feel how time and rate multiply together — notice how the 30-year column explodes as the rate climbs.
| Rate | After 10 years | After 20 years | After 30 years |
|---|---|---|---|
| 4% | $14,802 | $21,911 | $32,434 |
| 6% | $17,908 | $32,071 | $57,435 |
| 8% | $21,589 | $46,610 | $100,627 |
| 10% | $25,937 | $67,275 | $174,494 |
These are nominal (pre-inflation) figures. At 3% average inflation, $100,627 thirty years from now buys roughly what $41,000 buys today — real growth is what is left after inflation.
Frequently asked questions
What is the difference between compound and simple interest?
Simple interest is calculated only on the original principal, so it grows in a straight line. Compound interest is calculated on the principal plus all previously earned interest, so it grows on a curve. Example: $10,000 at 5% for 20 years earns $10,000 in simple interest (final $20,000), but about $16,533 in compound interest (final $26,533, annual compounding). The longer the time horizon, the wider that gap becomes.
What is the Rule of 72?
It is a quick estimate of how many years it takes to double your money: divide 72 by your annual return. At 6% your money doubles in about 12 years (72 / 6); at 9% in about 8 years. It is an approximation that is most accurate around 8% — the table above shows it lands within a few months of the exact figure across normal rates.
How much does compounding frequency change my returns?
Less than most people think. On $10,000 at 5% for 10 years, switching from annual to daily compounding adds about $198 — roughly 2% more interest. Frequency matters more at higher rates and over longer horizons, but the interest rate itself and the number of years matter far more. Compare APY (which already includes compounding) rather than the nominal rate when shopping for accounts.
How much does $10,000 grow in 20 years?
It depends entirely on the rate. At 4% (annual compounding) it grows to about $21,911; at 7% to about $38,697; at 10% to about $67,275. Compounded monthly at 7%, it reaches roughly $40,387. Add a $500 monthly contribution at 7% and the picture changes dramatically — the contributions alone become a large part of the balance.
Does this calculator account for taxes and inflation?
No — and this matters. It shows nominal, pre-tax growth at a constant rate. Real-world returns are reduced by income tax or capital-gains tax on interest (unless the account is tax-advantaged, like a Roth IRA, ISA, or TFSA) and eroded by inflation. At 3% inflation, money roughly halves in purchasing power every 24 years. Treat these figures as a clean "before friction" baseline, not a guarantee.
Why does my bank's actual return differ from this estimate?
Real accounts have variable rates that change over time, fees, minimum-balance rules, and tax withholding — this calculator assumes one fixed rate with none of those. Investment returns (stocks, funds) are not fixed at all; a 7% "average" is a long-run figure, not what any single year delivers. These are estimates for planning. Confirm exact terms with your bank, broker, or a financial advisor before making decisions.
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