Compound Interest Calculator

Compound interest is interest earned on both your original principal and on the interest that has already been added to your balance. Unlike simple interest (which only earns on the original amount), compound interest accelerates because each period's interest becomes part of the new base.

The formula is A = P(1 + r/n)^(n·t), where P is the starting principal, r is the annual rate (as a decimal), n is the number of compounding periods per year, and t is years. With monthly contributions, add the future value of an annuity: PMT × [((1 + r/n)^(n·t) − 1) / (r/n)].

For long-term diversified stock portfolios, 6–7% real (after inflation) or 9–10% nominal is the historical US average. Savings accounts and CDs pay 4–5% nominal in 2026. Use the conservative end (5–6%) for honest multi-decade planning.

At 7% annual return compounded monthly, $10,000 grows to about $81,200 in 30 years — over 8× the starting balance with zero further contributions. At 5% it grows to about $44,700. The Rule of 72 says money doubles every ~10.3 years at 7%.

At 7% compounded monthly, $500/month becomes about $610,000 after 30 years. You'll have contributed $180,000 — the other ~$430,000 is pure compounding. At $1,000/month it reaches ~$1.22M.

Divide 72 by your annual rate to estimate years to double your money. At 6% money doubles every 12 years; at 8% every 9 years; at 12% every 6 years. It's a fast mental check against any compound interest calculator output.

More frequent compounding helps but the effect is small at typical rates. At 7%, daily vs annual compounding differs by only ~0.25% per year. Monthly compounding matches how most brokerage and bank accounts report — use it as the default.

No — it projects pre-tax growth. For taxable brokerage accounts subtract ~0.5–1% from the assumed rate to model dividend and rebalancing taxes. Roth IRA and 401(k) growth is tax-deferred or tax-free, so no adjustment needed.

It shows nominal future dollars. To see today's purchasing power, either use a real return rate (e.g. 5–6% instead of 8–9%) or run the future value through the Inflation Calculator to translate it back to today's dollars.

Simple interest only pays on the original principal — so $10,000 at 5% simple over 30 years earns $15,000. The same amount at 5% compound monthly grows to ~$44,700. The gap widens dramatically over long horizons.

Time almost always beats amount. $200/month from age 25 to 65 at 7% becomes ~$525,000. The same person starting at 35 with $400/month (double the contribution) ends with only ~$487,000 — and contributes ~$48k more.

APR is the simple annual rate. APY (annual percentage yield) reflects the effect of compounding within the year. At 6% APR with monthly compounding, APY is about 6.17%. Banks must quote APY on deposit accounts.

Yes — the calculator supports both. Beginning-of-period contributions earn one extra period of interest each cycle, which adds about 0.5% per year of extra growth. Most retirement contributions land mid-month, so end-of-period is a reasonable default.

At $500/month and 7% return, about 38 years. At $1,000/month, ~26 years. At $2,000/month, ~18 years. Adding a $25k starting balance shaves another 1–2 years off each scenario.

Because returns on the existing balance start exceeding new contributions. In year 1 your $5,000 contribution dwarfs the $700 of growth on a $10,000 balance. By year 20, annual growth on a $200,000 balance can be $14,000 — several times your yearly contribution.