Free Compound Interest Calculator
Watch small, steady savings turn into serious money. Enter your starting amount, rate, and monthly contributions to see the growth year by year.
Projected growth
| Year | Contributed | Interest earned | Balance |
|---|
How to use the compound interest calculator
- Enter your starting principal — money already saved or invested.
- Set the expected annual return and how often interest compounds.
- Add a monthly contribution and the number of years, then watch the yearly breakdown.
Why compounding matters
Compound interest means you earn returns not just on your original money, but on all the returns it has already generated — growth that accelerates over time. The yearly table above shows this clearly: in the early years your contributions do most of the work, but eventually the interest column starts dwarfing what you put in. Three levers control the outcome: time, rate, and contributions. Time is the most powerful — starting ten years earlier routinely beats chasing a higher return later. Compounding frequency (daily vs. monthly vs. yearly) sounds important but barely moves the needle compared to the rate itself. And steady monthly contributions matter enormously: at a 7% return, $200 a month for 20 years adds roughly $48,000 of your own money but grows to well over $100,000 total. These projections ignore inflation, taxes, and fees, so treat them as a direction, not a promise — but the lesson holds: start early, contribute regularly, and let time do the heavy lifting.
Frequently asked questions
What is compounding frequency?
How often earned interest is added to your balance so it can earn interest itself. Monthly compounding is typical for savings accounts; the difference between daily and monthly is tiny.
What is the Rule of 72?
A quick mental shortcut: divide 72 by your annual rate to estimate the years needed to double your money. At 7%, money doubles roughly every 10 years.
Does this account for inflation and taxes?
No. Real returns are lower after inflation (historically ~2–3% per year) and taxes on gains. Subtract a few points from the rate for a more conservative real-world estimate.
Is it better to invest a lump sum or contribute monthly?
A lump sum invested earlier usually wins because it compounds longer, but monthly contributions are how most people actually build wealth — and they smooth out market ups and downs automatically.