Compound Interest Calculator
See how compound interest grows your savings and investments over time.
Future Value
$40,387
Contributions: $10,000 · Interest earned: $30,387
Initial Principal
$10,000
Total Contributions
$10,000
Interest Earned
$30,387
Year-by-Year Growth
| Year | Balance | Contributions | Interest |
|---|---|---|---|
| 1 | $10,723 | $10,000 | $723 |
| 2 | $11,498 | $10,000 | $1,498 |
| 3 | $12,329 | $10,000 | $2,329 |
| 4 | $13,221 | $10,000 | $3,221 |
| 5 | $14,176 | $10,000 | $4,176 |
| 6 | $15,201 | $10,000 | $5,201 |
| 7 | $16,300 | $10,000 | $6,300 |
| 8 | $17,478 | $10,000 | $7,478 |
| 9 | $18,742 | $10,000 | $8,742 |
| 10 | $20,097 | $10,000 | $10,097 |
| 11 | $21,549 | $10,000 | $11,549 |
| 12 | $23,107 | $10,000 | $13,107 |
| 13 | $24,778 | $10,000 | $14,778 |
| 14 | $26,569 | $10,000 | $16,569 |
| 15 | $28,489 | $10,000 | $18,489 |
| 16 | $30,549 | $10,000 | $20,549 |
| 17 | $32,757 | $10,000 | $22,757 |
| 18 | $35,125 | $10,000 | $25,125 |
| 19 | $37,665 | $10,000 | $27,665 |
| 20 | $40,387 | $10,000 | $30,387 |
How This Is Calculated
This compound interest calculator computes the future value of an investment using the compound interest formula with optional periodic contributions.
Compound interest formula: A = P(1+r/n)^(nt) + PMT × [((1+r/n)^(nt) − 1) / (r/n)], where P is the initial principal, r is the annual interest rate, n is the number of compounding periods per year, t is the number of years, and PMT is the periodic contribution.
This calculator uses monthly compounding (n=12), which is the standard for most savings and investment accounts. Periodic contributions are assumed to be made at the end of each period (ordinary annuity).
Compound interest formula: A = P(1+r/n)^(nt) + PMT × [((1+r/n)^(nt) − 1) / (r/n)]. Monthly compounding (n=12).
Frequently Asked Questions
What is compound interest?
Compound interest is interest earned on both your initial principal and the interest that accumulates over time. Unlike simple interest, compound interest grows exponentially — the "interest on interest" effect means your money accelerates its growth the longer it stays invested.
How often is interest compounded?
This calculator assumes monthly compounding (12 times per year), which is the most common frequency for savings accounts and investments. More frequent compounding results in slightly higher returns.
What is the Rule of 72?
The Rule of 72 is a quick estimation shortcut. Divide 72 by your annual interest rate to find approximately how many years it takes to double your money. For example, at 8% annual return, your money doubles in about 9 years (72 ÷ 8 = 9).
How do monthly contributions affect compound interest?
Monthly contributions dramatically accelerate growth through additional compounding. Even small regular contributions add up significantly over time. For example, $200/month at 7% over 30 years grows to over $228,000 from $72,000 in contributions.
What is a realistic rate of return?
For a diversified stock market investment, a long-term average return of 7-10% per year is reasonable based on historical S&P 500 data. High-yield savings accounts typically offer 3-5%.
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⚠️ Estimates only. Actual investment returns vary. Past performance does not guarantee future results. Consult a financial advisor.