Compound Interest Calculator
See how savings or investments grow with compound interest and regular monthly deposits, year by year.
What compound interest means
With simple interest you earn a return only on the money you put in. With compound interest you also earn a return on past interest. Each period's interest is added to the balance, and the next period's interest is calculated on that larger amount. Over long periods this snowball effect does most of the work.
A = P × (1 + r/k)^(k × t)
A is the final amount, P the starting deposit, r the annual rate as a decimal, k the number of compounding periods per year and t the number of years. When you add money every month, the calculator applies the same growth to each deposit from the month it goes in.
Example: $10,000 plus $300 a month
Starting with $10,000 and adding $300 a month at 7% compounded monthly for 20 years, you contribute $82,000 in total. The balance grows to about $196,000, so more than half of the final amount is interest. Waiting ten years to start would cut the final balance by more than half.
The rule of 72
To estimate how long money takes to double, divide 72 by the annual rate. At 6% it takes about 12 years; at 9% about 8 years. The rule is a quick mental check on the numbers above.
What affects your result most
- Time. Each extra year compounds on everything before it, so starting early matters more than any other input.
- Rate. The difference between 5% and 7% over 30 years is roughly 70% more money.
- Compounding frequency matters less than people think. Moving from annual to daily compounding at 7% raises the effective rate only from 7.00% to 7.25%.
- Fees and taxes. A 1% annual fund fee comes straight off the rate, so a 7% return becomes 6%.
Frequently asked questions
What is the difference between simple and compound interest?
Simple interest is paid only on the original principal. Compound interest is paid on the principal plus all interest already earned, so the balance grows faster over time.
How often is interest compounded?
It depends on the account. Savings accounts usually compound daily or monthly, many bonds semi-annually, and stock market returns are usually quoted as an annual average.
What annual return should I assume for investments?
Long-run US stock returns have averaged roughly 10% before inflation and about 7% after inflation, but returns vary a lot from year to year. Using 5–7% is a common conservative planning assumption.
Last reviewed Oct 20, 2026. Results are estimates; check important decisions with a qualified professional.