Compound Interest Calculator
See what your money can become. Enter a starting balance and monthly contributions to project growth year by year — with a chart that shows compounding in action.
Your investment plan
Growth chart
Year-by-year breakdown
| Year | Contributions | Interest earned | Balance |
|---|---|---|---|
| Enter your details and click Project growth. | |||
What is compound interest?
Compound interest means earning returns on your returns. In year one, a 7% return on $10,000 adds $700. In year twenty, that same 7% applies to a much larger balance — so it adds thousands. The growth curve bends upward over time, which is why the last decade of a long investment horizon typically produces more growth than all the earlier decades combined. Einstein probably never called it the eighth wonder of the world, but the math is wonderful enough on its own.
The formula
With monthly contributions (added at each month's end) and monthly compounding:
where P is the starting principal, PMT the monthly contribution, r the monthly rate (annual ÷ 12), and n the number of months. The first term grows your starting balance; the second grows the stream of contributions.
Choosing a realistic return
The US stock market has averaged about 10% nominal per year over very long periods — roughly 7% after inflation. Many planners project 6–8% nominal for a stock-heavy portfolio and 3–5% for a conservative one. These projections ignore taxes, fees, and inflation, so treat the result as a planning guide, not a promise. When in doubt, run the numbers twice: once optimistic, once conservative.
Compound Interest FAQs
What is compound interest?
Earning returns on both your original money and previously earned returns. Over time the growth curve bends upward — gains generate their own gains, which is why starting early beats investing big late.
How do you calculate compound interest with monthly contributions?
FV = P(1+r)^n + PMT × (((1+r)^n − 1) / r), with monthly rate r and n months. This calculator compounds monthly and adds contributions at each month's end.
What is a realistic rate of return to assume?
US stocks have averaged ~10% nominal (~7% after inflation) long-term. Many planners use 6–8% nominal for projections. Conservative assumptions avoid overestimating.
Is a lump sum or monthly contributions better?
Mathematically, earlier lump sums usually win — more money compounds longer. But monthly contributions build the habit, average out market timing, and match how most people invest from a paycheck.