Math for Money

Compound Interest Calculator

Enter a starting balance, a monthly contribution, a rate and a number of years. You will see the final balance and how much of it each year comes from your own money versus interest.

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$
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years

Balance after 20 years

$485,510

48.5% of that is interest. Your balance is 1.94 times what you put in.

Total contributions

$250,000

Interest earned

$235,510

Growth by year

  • Contributions
  • Interest

Year-by-year breakdown

YearContributionsInterestBalance
1$22,000$927$22,927
2$34,000$2,629$36,629
3$46,000$5,153$51,153
4$58,000$8,549$66,549
5$70,000$12,868$82,868
6$82,000$18,167$100,167
7$94,000$24,503$118,503
8$106,000$31,940$137,940
9$118,000$40,543$158,543
10$130,000$50,382$180,382
11$142,000$61,531$203,531
12$154,000$74,070$228,070
13$166,000$88,080$254,080
14$178,000$103,652$281,652
15$190,000$120,877$310,877
16$202,000$139,857$341,857
17$214,000$160,695$374,695
18$226,000$183,503$409,503
19$238,000$208,399$446,399
20$250,000$235,510$485,510

What is compound interest?

Compound interest means earning returns on your past returns. Whatever you earn in one period stays invested and is added to your balance, so the next period's return is calculated on a larger amount. The longer you leave it, the larger the share of your balance that comes from interest. That is why the orange part of the chart above grows faster in the later years.

The compound interest formula

For a single lump sum, the ending balance is:

Balance = Principal × (1 + annual rate)years

For example, $10,000 at 6% for 20 years: 10,000 × 1.0620 ≈ $32,071.

For a fixed contribution made at the end of every month, the contributions grow to:

Balance = Monthly contribution × [(1 + monthly rate)months − 1] ÷ monthly rate

The monthly rate depends on the compounding option you choose:

  • Annually: monthly rate = (1 + annual rate)1/12 − 1. Over a full year the growth equals the annual rate exactly.
  • Monthly: monthly rate = annual rate ÷ 12. Interest is added every month, so the effective yearly growth is slightly higher than the stated rate.

This calculator grows your initial investment and your monthly contributions month by month using these rules, then adds the two together.

The Rule of 72: how long until your money doubles?

For a quick estimate of how many years it takes to double your money, divide 72 by the annual rate in percent. At 6% it takes about 72 ÷ 6 = 12 years. At 8% it takes about 9 years. It is an approximation, but it is close for the rates most people work with.

Worked examples

Each example has its own page with a full table of rates. The balances below use a hypothetical 7% annual return and are not a forecast.

See all compound interest examples

  • Savings Goal Calculator: Find out how much to save each month to reach a target amount by a deadline, given what you have saved so far and the rate you expect to earn.
  • FIRE Calculator: Find your FIRE number from your annual spending and withdrawal rate, and see how many years of saving and growth it takes to reach it.
  • Investment Fee Calculator: Compare your ending balance with and without an annual fund or advisory fee, and see how much the fee costs you over time.
  • CAGR Calculator: Turn a starting value, an ending value and a number of years into a compound annual growth rate, with total return, gain and growth multiple.

Frequently asked questions

Is this the amount I will actually end up with?

No. The calculator assumes the same rate of return every single year. Real investments go up and down, and some years lose money. The result also ignores fund fees, taxes and inflation. Use it to understand how time and rate of return affect the outcome, not as a promise of what you will earn.

What rate of return should I enter?

There is no single right answer. A useful approach is to run three scenarios: a cautious one, a middle one and an optimistic one, and look at the range. Savings accounts and government bonds pay lower rates with little variation. Stocks have historically returned more over long periods, but with large swings from year to year and the possibility of losses.

Should I choose annual or monthly compounding?

If your rate is an APY or an average annual return, choose annual: that figure already includes the effect of compounding, so $10,000 at 6% is exactly $10,600 after one year. If your rate is a nominal rate or APR that compounds monthly, choose monthly: the monthly rate is the annual rate divided by 12, and $10,000 at 6% becomes about $10,617 after one year.

Does it matter whether I contribute at the beginning or the end of the month?

Only a little. Each contribution made at the beginning of the month earns one extra month of return, so the contribution part of your balance ends up larger by one month of growth. At a 6% annual rate that is roughly 0.5% more.

Someone offered me a guaranteed, high-return "compounding" investment. Is it legitimate?

Be very careful. Real compounding comes from holding assets for a long time, the returns vary, and nobody can guarantee them. Offers that promise guaranteed principal together with very high daily or monthly returns, especially ones that reward you for recruiting others, are a common pattern in Ponzi schemes. The compounding balance shown on screen often cannot be withdrawn.