Compound Interest Calculator: See How Your Money Grows

Compound interest is one of the most powerful concepts in personal finance. Our free Compound Interest Calculator shows you exactly how your savings and investments grow over time, including the effect of regular monthly contributions.

How to Use the Calculator

Enter your initial investment: The lump sum you’re starting with
Set monthly contributions: How much you plan to add each month
Enter the annual interest rate: The expected return rate
Choose the time period: How many years you plan to invest
Select compounding frequency: How often interest is calculated (monthly, quarterly, annually, or daily)
Click Calculate: See your future value, total contributions, interest earned, and growth table

Understanding the Results

Future Value: The total amount your investment will be worth at the end of the period
Total Contributions: Your initial investment plus all monthly contributions
Interest Earned: How much your money grew from compound interest alone
Total Return: The percentage gain on your total contributions
Year-by-Year Table: See how your balance, contributions, and interest grow each year

The Power of Compounding

Compound interest means you earn interest on your interest. A $10,000 investment at 7% annual return doesn’t just earn $700 per year. In year two, you earn interest on $10,700, then on the new total, and so on. Over decades, this snowball effect is dramatic.

Common Use Cases

Retirement planning: See how 401(k) or IRA contributions grow over 30+ years
Savings goals: Calculate how regular deposits reach your target
Investment comparison: Compare different rates and contribution amounts
Education planning: Estimate college fund growth over 18 years
Debt perspective: Understand how compound interest works against you on loans

Tips

Even small monthly contributions have a large impact over long periods
The compounding frequency matters more at higher interest rates
Start early — time is the biggest factor in compound growth
Try different scenarios to see the impact of increasing monthly contributions by even $50

Frequently Asked Questions

What interest rate should I use? For stock market investments, 7% (after inflation) is a common historical average. Savings accounts typically offer 4-5%. Adjust based on your specific investment.

Does it account for inflation? No. Use an inflation-adjusted rate (subtract ~2-3% from your expected return) for real purchasing power estimates.

How accurate is this? The math is precise for fixed-rate compound interest. Real investments fluctuate, so treat results as estimates.

Try our free Compound Interest Calculator to see how your money grows.