Compound Interest Calculator
See how a lump sum plus optional regular deposits grows over time with compound interest.
Content updated July 1, 2026
| Year | Contributed | Balance |
|---|---|---|
| 5 | $22,000 | $28,495 |
| 10 | $34,000 | $54,714 |
| 15 | $46,000 | $91,882 |
| 20 | $58,000 | $144,573 |
Compound interest is the reason money grows faster the longer you leave it invested: you earn returns not just on your original deposit, but on all the interest it has already earned. Einstein reputedly called it the eighth wonder of the world, and over decades the effect is genuinely dramatic.
This calculator shows the future value of a starting amount, with an optional regular monthly deposit, growing at a rate you choose. It breaks down how much you put in versus how much is pure interest, and shows the balance at the end of every year.
The Compound Interest formula
A = P × (1 + r/n)^(n × t)A = final amount · P = principal (starting balance) · r = annual interest rate (as a decimal) · n = times interest compounds per year · t = number of years. With regular deposits, the future value of those contributions is added on top.
Worked example
Invest $10,000 at 7% compounded monthly for 20 years. Here P = 10,000, r = 0.07, n = 12, t = 20. That gives A = 10,000 × (1 + 0.07/12)^(12 × 20) ≈ $40,387 — roughly quadrupling, with about $30,387 of that being pure interest. Add $200 a month and the balance passes $144,000.
How compound interest works
With simple interest you'd earn the same amount every year. With compound interest, each period's interest is added to the balance, so the next period's interest is calculated on a bigger number. The formula for a lump sum is A = P(1 + r/n)^(nt), where P is the principal, r the annual rate, n the number of times interest compounds per year, and t the number of years.
The two biggest levers are time and rate. Starting earlier matters more than almost anything else — a pot left to compound for 30 years dwarfs the same contributions over 15 years, because the later years do the heaviest lifting.
Compounding frequency
Interest can compound annually, monthly, or daily. More frequent compounding earns slightly more, because interest starts earning interest sooner. The difference between monthly and daily is small; the difference between compounding and not reinvesting at all is enormous.
This tool lets you pick the frequency so you can match a specific savings account or investment and compare like for like.
A realistic note on returns
Savings accounts pay a modest, fairly predictable rate. Stock-market investments have historically returned more over the long run but rise and fall along the way — the average hides some bad years. Use a conservative rate for planning, and remember inflation reduces what your future balance can actually buy.
Frequently asked questions
▶What is compound interest in simple terms?
It's interest earned on both your original money and on the interest you've already earned. Over time this 'interest on interest' makes your balance grow faster and faster.
▶How often should interest compound?
More frequent compounding (daily or monthly) earns a little more than annual compounding, but the gap is small. What matters far more is the rate and how long you stay invested.
▶Does this account for inflation or tax?
No. The result is the nominal balance before tax and inflation. For real spending power, mentally discount the future value, or use a lower 'real' rate of return.
▶What is the compound interest formula?
For a lump sum it is A = P(1 + r/n)^(nt), where P is the principal, r the annual rate as a decimal, n the number of times it compounds per year, and t the number of years. If you also add regular deposits, each deposit compounds from the moment it lands.
▶What is the difference between APR and APY?
APR is the simple annual rate. APY (annual percentage yield) includes the effect of compounding within the year, so it is slightly higher. A 12% rate compounded monthly has an APY of about 12.68% — the APY is what you actually earn.
▶What is the Rule of 72?
A quick shortcut: divide 72 by your annual interest rate to estimate how many years it takes your money to double. At 8%, that's 72 ÷ 8 = 9 years. It's an approximation, but a handy one for compound growth.
▶Does compounding daily vs monthly make a big difference?
Only a small one. Daily compounding earns a touch more than monthly, which earns a touch more than annually — but the gap is minor next to the rate and time invested. Don't chase compounding frequency; chase a good rate and a long horizon.
Learn more
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Open calculator →Disclaimer: Compound Interest Calculator results are estimates for general information and education only, and are not financial, tax, legal or medical advice. Verify important decisions with a qualified professional.