Compound Interest
See how compound interest grows savings over time.
Future value
$300,851
Year-by-year breakdownShow ▾Hide ▴
| Year | Contributed | Growth | Balance |
|---|---|---|---|
| 0 | $10,000 | $0 | $10,000 |
| 1 | $16,000 | $919 | $16,919 |
| 2 | $22,000 | $2,339 | $24,339 |
| 3 | $28,000 | $4,294 | $32,294 |
| 4 | $34,000 | $6,825 | $40,825 |
| 5 | $40,000 | $9,973 | $49,973 |
| 6 | $46,000 | $13,782 | $59,782 |
| 7 | $52,000 | $18,299 | $70,299 |
| 8 | $58,000 | $23,578 | $81,578 |
| 9 | $64,000 | $29,671 | $93,671 |
| 10 | $70,000 | $36,639 | $106,639 |
| 11 | $76,000 | $44,544 | $120,544 |
| 12 | $82,000 | $53,455 | $135,455 |
| 13 | $88,000 | $63,443 | $151,443 |
| 14 | $94,000 | $74,587 | $168,587 |
| 15 | $100,000 | $86,971 | $186,971 |
| 16 | $106,000 | $100,683 | $206,683 |
| 17 | $112,000 | $115,820 | $227,820 |
| 18 | $118,000 | $132,486 | $250,486 |
| 19 | $124,000 | $150,790 | $274,790 |
| 20 | $130,000 | $170,851 | $300,851 |
A compound interest calculator shows how money grows when the interest you earn also starts earning interest. Over long periods this compounding is what turns steady saving into a large balance.
Enter a starting amount, an interest or return rate, how often it compounds, the number of years, and any regular contributions. The tool projects the ending balance and separates how much came from your deposits versus growth.
The two things that matter most are time and rate. Starting earlier gives compounding more cycles to work, which is why a smaller amount invested young can beat a larger amount invested later.
How this calculator works
For a lump sum, the future value is A = P x (1 + r/n)^(n x t), where P is the principal, r is the annual rate, n is the number of compounding periods per year, and t is years. When you add regular contributions, each deposit is compounded for the time remaining until the end, and the calculator sums the growth of the starting balance plus the future value of that stream of deposits. More frequent compounding (daily versus annual) raises the result slightly, but the rate and the time horizon dominate. The gap between your total contributions and the ending balance is the compounded growth.
What affects the number
- Time in the market is the strongest factor; each additional year compounds on a larger base.
- The annual rate of return has an outsized effect over long horizons because it compounds repeatedly.
- Compounding frequency (daily, monthly, annually) changes the result modestly, with daily slightly ahead of annual.
- Regular contributions add new principal that also begins compounding, often supplying most of the ending balance.
- Fees and taxes reduce the effective rate; even a 1% annual fee meaningfully lowers a long-run total.
- Inflation erodes purchasing power, so a real (inflation-adjusted) return matters more than the nominal number.
Frequently asked questions
What is the rule of 72?
The rule of 72 is a shortcut to estimate how long money takes to double: divide 72 by the annual rate. At 6% a balance doubles in about 12 years; at 8%, in about 9 years. It is an approximation but a useful way to feel the power of a higher rate.
Does compounding frequency really matter?
It matters, but less than people expect. Moving from annual to monthly or daily compounding raises the result by a small amount at the same stated rate. The rate itself and the number of years have a far larger impact on the ending balance.
How do contributions change the result?
Regular contributions add fresh principal that compounds for the remaining time. Over long horizons, the sum of your deposits and their growth often makes up the majority of the final balance, which is why consistent contributions beat trying to time a single lump sum.
What rate should I use?
For a savings account, use its APY. For long-term investing, people often model a range such as 5% to 8% to reflect uncertainty, and compare a nominal rate against an inflation-adjusted one. Lower assumptions give a more conservative, realistic plan.
This calculator provides general estimates for educational purposes only and is not financial, medical, legal, or tax advice. Your actual results depend on your specific situation and current rates.