Compound Interest Calculator
Compound interest is the engine behind almost every long-term savings and investment plan. When your money earns interest, that interest is added to your balance, and from then on it earns interest too. Year after year, this snowball effect turns steady, modest contributions into a surprisingly large sum. The difference between starting at 25 and starting at 35 is often tens of thousands of dollars, even if the later starter saves more each month, because time in the market matters more than almost anything else. This free compound interest calculator shows you exactly how your money can grow. Enter your starting deposit, the amount you plan to add each month, your expected annual interest rate, and how many years you will let the money grow. You can also choose whether interest compounds monthly, quarterly, or annually. The calculator instantly shows your future value, how much of it came from your own contributions, and how much came from interest, plus a year-by-year growth table so you can watch the balance climb and see the interest earned each year get bigger as your balance grows.
Your Results
Future value
$0.00
Year-by-Year Growth
How to Use This Calculator
- Enter your initial deposit. This is the lump sum you are starting with today, such as $10,000 you already have saved.
- Add your monthly contribution. Enter the amount you can add every month. Even $50 or $100 a month makes a large difference over a decade because each contribution starts compounding too.
- Set your annual interest rate and time horizon. Use a rate that matches your account or investment, pick how many years the money will grow, and choose monthly, quarterly, or annual compounding.
- Click Calculate and study the table. Your future value appears at the top, with a breakdown of principal, contributions, and interest, and the yearly table shows how growth accelerates as the balance rises.
Worked Example
Suppose you start with $10,000, add $100 every month, earn 7% a year, and let the money grow for 10 years with monthly compounding. Your total contributions are $22,000: the $10,000 starting deposit plus $12,000 in monthly contributions ($100 times 120 months). Interest does the rest. After 10 years your balance is $37,405.09, which means you earned $15,405.09 in interest on top of the money you put in. The yearly table shows the acceleration clearly: in year 1 you earn about $762.16 of interest, but by year 10 you earn about $2,477.43 in a single year, because interest is now calculated on a balance of more than $33,000. If you made no contributions at all, the same $10,000 at 7% for 10 years would grow to $20,096.61 with monthly compounding. Switch the compounding frequency to annually and the no-contribution result becomes $19,671.51, the classic textbook figure for 7% annual compounding. The lesson is the same either way: steady contributions plus time beat a high rate alone, and the earlier you start, the harder your money works for you.
Frequently Asked Questions
What is compound interest?
Compound interest is interest earned on both your original deposit and the interest you have already earned. Each compounding period, interest is added to your balance, so the next period earns interest on a larger amount. Over many years this snowball effect can add far more to your savings than simple interest, which only pays interest on the original principal.
How do monthly contributions affect my future value?
Monthly contributions usually matter even more than the interest rate. Every dollar you add starts earning interest itself, and early contributions have the most time to compound. In the worked example below, $100 a month adds $12,000 of contributions over ten years, but those contributions earn thousands of dollars of extra interest on top of that.
What is a good interest rate to use in this calculator?
Use a rate that matches where the money will actually sit. A high-yield savings account might pay around 4 to 5 percent, while a diversified stock market investment has historically averaged around 7 percent a year after inflation is ignored, though with much more risk and volatility. For a conservative estimate, try 4 or 5 percent; for a long-term investment estimate, 7 percent is a common planning figure.
Does compounding monthly, quarterly or annually make a big difference?
The difference is real but modest. More frequent compounding means interest starts earning interest sooner, so monthly compounding gives a slightly higher balance than quarterly or annual compounding at the same rate. Over ten years at 7 percent, the gap between monthly and annual compounding on $10,000 is only a few hundred dollars, far less than the effect of adding contributions or investing for a few extra years.
Is compound interest the same as simple interest?
No. Simple interest is calculated only on the original principal, so the interest earned each year stays the same. Compound interest is calculated on the principal plus all interest earned so far, so the interest earned grows every year. Almost all savings accounts, certificates of deposit and investment accounts use compound interest, which is why starting early matters so much.