CalcMaven

Compound Interest Calculator

See how your money grows over time with compound interest and regular contributions.

Inputs

$
$
7.0%
020
3.0%
015
10 years
150

Results

Future Value
$54,713.58
Real Value (Inflation-Adjusted)
$40,712.04
In today's dollars (after 3% annual inflation)
⚠
Inflation impact: $14,001.54 of your future balance will be eroded by inflation. Your $54,713.58 will only buy what $40,712.04 buys today.
Total Contributions
$34,000
Interest Earned
$20,713.58

Disclaimer: This calculator provides estimates for informational purposes only. Results are not financial advice. Consult a qualified financial advisor for decisions about your specific situation. Actual rates, terms, and conditions may vary by lender and individual circumstances.

How Does the Compound Interest Calculator Work?

Compound interest is interest calculated on both the initial principal and the accumulated interest from previous periods. This "interest on interest" effect causes your money to grow exponentially over time, making it arguably the most powerful force in personal finance. Albert Einstein reportedly called it the eighth wonder of the world. The compound interest formula accounts for the principal amount, the interest rate, the compounding frequency, and the time period. When you add regular monthly contributions, the growth accelerates dramatically because each contribution immediately begins earning compound interest. The more frequently interest compounds, the faster your money grows, though the difference between daily and monthly compounding is minimal. What matters most is the rate, time, and consistency of contributions.

Formula: A = P(1 + r/n)^(nt)

How to Use This Calculator

Enter your initial deposit (principal), the annual interest rate, and how long you plan to invest. Select the compounding frequency — monthly is the most common for savings accounts, while daily is used by some high-yield accounts. Add any planned monthly contributions to see how regular savings amplifies your growth. The calculator shows your total balance, how much came from your contributions versus earned interest, and an optional inflation-adjusted value. Experiment with different rates and time periods to see how dramatically these factors affect the outcome.

Example Calculation

Emma starts investing at age 25 with $5,000 and adds $300 per month to an index fund averaging 9% annual return (compounded monthly) until age 55.

  1. 1Principal = $5,000
  2. 2Monthly contribution = $300
  3. 3Annual rate = 9%, monthly rate = 0.75%
  4. 4Time = 30 years (360 months)
  5. 5Future value of principal: $5,000 x (1.0075)^360 = $73,712
  6. 6Future value of contributions: $300 x [((1.0075)^360 - 1) / 0.0075] = $549,042
  7. 7Total = $73,712 + $549,042 = $622,754
  8. 8Total contributed = $5,000 + ($300 x 360) = $113,000
  9. 9Interest earned = $622,754 - $113,000 = $509,754
Result: Emma's $113,000 in total contributions grows to $622,754 — that is $509,754 in compound interest, more than 4.5 times what she invested. This is the power of starting early and staying consistent.

Understanding Your Results

Your total balance is split between contributions (money you deposited) and compound interest (money your money earned). Over long periods, interest often exceeds contributions by a large margin. The inflation-adjusted line shows the real purchasing power of your future balance. Compare your projected balance against savings goals to see if you are on track. If you need more growth, the three most effective levers are: increasing monthly contributions, increasing your rate of return (with appropriate risk), or extending your time horizon.

What Drives Compound Growth

Time

The most critical factor. Starting 10 years earlier can result in double the final balance, even with smaller contributions. Time cannot be bought back.

Rate of Return

Even 1-2% more annual return creates enormous differences over decades. This is why keeping fees low (they reduce effective return) matters so much.

Consistent Contributions

Regular monthly additions create a dollar-cost averaging effect and each deposit begins compounding immediately, amplifying growth.

Compounding Frequency

Daily compounding earns slightly more than monthly or annual, but the difference is minimal. Focus on rate and consistency instead.

Tips & Best Practices

  • ✓Start investing early — compound interest rewards time more than anything else. Starting at 25 vs 35 can double your retirement balance.
  • ✓The difference between 6% and 8% annual return seems small, but over 30 years it can mean hundreds of thousands of dollars.
  • ✓Daily compounding earns slightly more than monthly, but the difference is minimal. Focus on the rate itself and keeping fees low.
  • ✓Reinvest all dividends and interest — removing them breaks the compounding chain.
  • ✓Use the Rule of 72 for quick mental math: divide 72 by your interest rate to estimate how many years it takes to double your money.

Frequently Asked Questions

What is compound interest?▾
Compound interest is interest earned on both your original deposit and on interest that has already been earned. For example, if you invest $1,000 at 10% annual interest, you earn $100 in year one. In year two, you earn interest on $1,100 (original plus first year interest), giving you $110 in interest. In year three, you earn on $1,210, giving $121. This snowball effect accelerates over time and is the reason long-term investors build substantial wealth.
How does compounding frequency affect returns?▾
More frequent compounding (daily vs. annually) produces slightly higher returns because interest starts earning interest sooner. However, the practical difference is small. $10,000 at 5% for 10 years: annual compounding gives $16,289, monthly gives $16,470, daily gives $16,487. The difference between daily and monthly is just $17 over a decade. Focus on getting a higher rate rather than more frequent compounding.
What is the Rule of 72?▾
The Rule of 72 is a quick way to estimate how long it takes to double your money. Divide 72 by your annual interest rate. At 6% interest, your money doubles in approximately 12 years (72/6). At 8%, it doubles in 9 years. At 10%, just 7.2 years. This simple mental shortcut helps you quickly evaluate investment opportunities and understand the impact of different rates.
Why does this calculator show inflation-adjusted values?▾
While your nominal balance grows over time, inflation reduces the purchasing power of money. A million dollars in 20 years will not buy what a million dollars buys today. At 3% inflation, you would need about $1.8 million in 20 years to match today's $1 million in purchasing power. The inflation-adjusted line shows what your future balance is worth in today's dollars, giving you a more realistic picture of your real wealth.
How much should I invest monthly to become a millionaire?▾
It depends on your rate of return and time horizon. At 8% annual return: saving $400/month for 40 years, $750/month for 30 years, or $1,700/month for 20 years will each reach approximately $1 million. The earlier you start, the less you need to save monthly. This demonstrates why time is the most powerful factor in compound growth.
By CalcMaven Editorial TeamLast Updated: February 2026

Related Calculators

Savings Goal Calculator

Calculate how much you need to save each month to reach your financial goal.

Investment Return Calculator

Calculate your investment returns accounting for fees and inflation.

Retirement Calculator

Plan your retirement by projecting savings growth based on your contributions and timeline.

Emergency Fund Calculator

Calculate your recommended emergency fund size based on monthly expenses.

Free Compound Interest Calculator — See Your Growth | CalcMaven