📈 Compound Interest Calculator

The most powerful force in finance — visualized.

Investment Details

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Final Balance
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Total Contributed
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Interest Earned
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Money Multiplied

Growth Over Time

The Compound Interest Calculator shows how your money grows over time when interest earns interest. Enter your initial investment, monthly contribution, interest rate and time period to see your total returns and a full year-by-year breakdown.

How to use the compound interest calculator

Enter your starting balance ("initial investment"), the amount you'll add each month ("monthly contribution"), the expected annual rate of return, and how many years you'll let it grow. Choose a compounding frequency — most index funds and most savings accounts compound monthly or daily, so leave the default if unsure. The results panel shows the total balance at the end, the total contributions made, and the interest earned. The line chart and yearly breakdown table show how the balance grows year by year — the curve always bends upward as interest builds on interest.

The math behind compounding

The base formula is A = P(1 + r/n)nt — final amount equals principal times (1 plus rate divided by compounding periods per year), all raised to the number of periods. Add a regular contribution C and the formula expands to A = P(1+r/n)nt + C × [((1+r/n)nt − 1) / (r/n)]. The exponent is what makes compounding feel like magic: small differences in rate or duration produce enormous differences in outcome decades out. A "rule of 72" shortcut: at rate r%, money doubles in roughly 72 ÷ r years, so 8% annual return doubles your stake every nine years.

Frequently Asked Questions

What is compound interest?
Compound interest is interest calculated on both your original principal and the interest already earned. Over time this creates exponential growth — famously described by Einstein as the "eighth wonder of the world".
How often does interest compound?
It depends on the account. Common options are daily, monthly, quarterly or annually. More frequent compounding = slightly more growth.
What is a realistic interest rate to use?
Savings accounts: 3–5%. Index funds (historical average): 7–10% per year. Use conservative estimates for planning.
How much should I invest to become a millionaire?
Investing $500/month at 8% annual return for 30 years grows to over $700,000. Start early — time is the biggest factor.
Should I account for inflation?
Yes if you want a "real" answer. Subtract roughly 2–3% from the rate of return to get the inflation-adjusted growth. The calculator shows nominal growth; mentally subtract that inflation rate to think in today's dollars.
What's the biggest mistake people make?
Starting late. Time is the most powerful variable in the formula because the exponent is what does the heavy lifting. $200/month for 40 years beats $500/month for 20 years at the same rate.

Common scenarios

Sizing a Roth IRA contribution to retire on time, stress-testing whether a 6% return is enough to hit your target, comparing the long-term cost of fees (1% drag over 30 years removes about a quarter of your terminal balance), planning a child's college fund 18 years out, or simply seeing what consistent saving could become.