Compound Interest Calculator
Watch small monthly contributions turn into serious money — the math of "interest on interest", computed privately in your browser.
Year-by-year growth
| Year | Contributed | Interest so far | Balance |
|---|
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How compounding actually works
Compound interest is interest earned on interest. Each period, your balance grows by the period's rate — and the next period's interest is calculated on the new, larger balance. The growth is exponential, not linear, which is why the final years of a long savings plan add far more than the early ones.
A concrete example: 10,000 at 7% annual return, compounded monthly, left alone for 20 years becomes roughly 40,100 — four times the starting amount, without adding a cent. Add 300 per month and the balance passes 156,000, of which only 82,000 was ever contributed. The rest — nearly half — is the compounding effect.
The rule of 72
For a quick mental estimate, divide 72 by the annual return: that's roughly how many years it takes money to double. At 6% it doubles every ~12 years; at 8%, every ~9. Use the calculator to check — the rule is close but slightly optimistic at high rates.
Why starting early beats saving more
Time is the exponent in the compounding formula, and exponents dominate. Someone who saves 200 a month from age 25 to 35 and then stops can end up with more at 65 than someone who saves 200 a month from 35 to 65 — at the same return rate. The first saver's money simply had more decades to compound. Run both scenarios in the calculator; the table makes the difference brutally clear.
How the calculator computes your projection
It iterates period by period exactly like a real account: balance × (1 + annual rate ÷ compounding periods) + your contribution for that period. Monthly contributions are spread evenly across the compounding frequency you choose (daily, monthly, quarterly, semi-annual or annual). The year-by-year table snapshots the balance, your total contributions and cumulative interest at each year end — so you can see the crossover point where interest earned overtakes money contributed.
Frequently asked questions
How is compound interest calculated?
Each compounding period, interest is calculated on the current balance — including interest already earned — and added to it. The calculator iterates period by period: balance × (1 + rate/periods) plus your contribution, which is exactly how compounding works in real accounts.
Which compounding frequency should I choose?
Match your account: most savings accounts compound monthly, bonds often semi-annually. Higher frequency yields slightly more — the difference between monthly and annual compounding at 7% over 20 years is roughly one extra year of growth.
Are these returns guaranteed?
No. The calculator assumes a constant annual return, which real markets do not provide. Treat the result as the mathematical effect of compounding at that average rate, not a prediction or investment advice.
Does it account for inflation?
Not directly. A quick rule: subtract expected inflation from your return rate to see growth in today's money — 7% nominal with 3% inflation behaves roughly like 4% real.
Is my data private?
Yes. All calculations run in your browser. Nothing is uploaded, logged or stored.