Compound Interest Calculator
Standard compound interest formula ยท By Stuart Mathieson · Updated October 2026
Starting investment amount
Expected annual return rate
Investment duration
How often interest is calculated
Additional monthly deposits
Results
Final Balance
Total Contributions
Interest Earned
Results are estimates for illustration only and are not financial advice. Consult a qualified financial professional before making financial decisions.
How the compound interest calculator works
Compound interest is interest earned on your original deposit and on the interest it has already earned. The calculator adds two parts together: the growth of your starting balance, and the growth of your regular contributions.
- P
- - the initial principal
- r
- - the annual interest rate as a decimal (7% = 0.07)
- n
- - how many times a year interest is compounded (12 for monthly)
- t
- - the number of years
- C
- - the contribution per compounding period - your monthly contribution × 12 ÷ n, added at the end of each period
Worked example
Starting with $10,000, adding $200 a month, earning 7% a year compounded monthly, for 20 years:
- You pay in $10,000 + $200 × 240 months = $58,000.
- The final balance is $144,572.72.
- Interest earned is $144,572.72 − $58,000 = $86,572.72 - more than everything you paid in.
How time and compounding frequency affect growth
Time matters most, because each year's interest earns interest in every year that follows. Using the same example ($10,000 plus $200 a month at 7%):
| After | You paid in | Balance | Interest earned |
|---|---|---|---|
| 5 years | $22,000.00 | $28,494.83 | $6,494.83 |
| 10 years | $34,000.00 | $54,713.58 | $20,713.58 |
| 20 years | $58,000.00 | $144,572.72 | $86,572.72 |
| 30 years | $82,000.00 | $325,159.17 | $243,159.17 |
The interest earned in the last 10 years ($156,586) is almost double the interest from the first 20 years ($86,573).
Compounding frequency
More frequent compounding helps, but much less than the rate or the number of years. Here is $10,000 at 6% for 10 years with no contributions:
| Compounded | Final balance | Interest earned |
|---|---|---|
| Annually | $17,908.48 | $7,908.48 |
| Quarterly | $18,140.18 | $8,140.18 |
| Monthly | $18,193.97 | $8,193.97 |
| Daily | $18,220.29 | $8,220.29 |
The rule of 72
To estimate how long it takes to double your money, divide 72 by the annual rate. At 7%, 72 ÷ 7 ≈ 10.3 years; the exact answer with annual compounding is 10.2 years.
Things to keep in mind
- Returns aren't fixed. Savings accounts pay a stated rate, but investment returns vary from year to year. A constant rate is a simplification, so treat long-term results as an illustration rather than a forecast.
- Inflation. Money in 20 years will buy less than the same amount today - the Inflation Impact Calculator shows how much less.
- Taxes and fees. Interest may be taxable and investment fees reduce growth; neither is included here.
- APY vs interest rate. Banks often quote the APY (annual percentage yield), which already includes compounding. If you enter an APY, choose annual compounding so compounding isn't counted twice.
Frequently asked questions
How does compounding frequency affect the result?
More frequent compounding (daily vs. annually) earns slightly more interest on the same rate, because interest starts earning its own interest sooner.
When are monthly contributions added?
Contributions are treated as being made at the end of each period and grow at your chosen compounding frequency for the remaining time.
Does this account for inflation?
No - this shows nominal growth. Use the Inflation Impact Calculator alongside it to see what your future balance is worth in today's purchasing power.
What's the difference between simple and compound interest?
Simple interest is paid only on the original amount; compound interest is also paid on interest already earned. $10,000 at 6% simple interest earns $6,000 over 10 years, compared with $7,908.48 when the interest compounds annually.
Sources
- Compound interest (glossary) - Investor.gov, U.S. Securities and Exchange Commission
- Compound Interest Calculator - Investor.gov, U.S. Securities and Exchange Commission