Free online tool
Compound Interest Calculator
See how a starting balance plus regular contributions grow over time.
The magic of compounding
Compound interest is often called the eighth wonder of the world for good reason. When your returns earn returns of their own, growth accelerates over time. Starting even a decade earlier — or adding a small monthly contribution — can more than double your final balance, without you ever having to pick a hot stock.
How to use the calculator
Enter your starting balance, the amount you plan to add each month, the annual return you expect (7% is a common long-term average for a broad stock index), and the number of years. The tool splits the result into what you contributed versus what compounding added — the second number is usually the eye-opener.
+Is this after inflation?
No. Enter a lower 'real' rate (nominal minus expected inflation) to see purchasing power in today's money.
+Are taxes included?
No. Investment gains outside a tax-advantaged account are usually taxed, which reduces your net return.
Watching money grow on itself, not just on the original deposit
Compound interest is calculated as principal multiplied by (1 plus rate divided by number of compounding periods per year) raised to the power of periods times years. Unlike simple interest, each round of interest gets added to the balance and then itself starts earning interest, which is why the growth curve bends upward rather than staying a straight line.
This snowballing effect is the single biggest reason long-term investing rewards patience: the same annual rate produces dramatically different outcomes over 10 years versus 30 years, because most of the growth in the later years comes from interest earned on interest accumulated earlier, not from new money added.
The rule of 72 as a mental shortcut
If you want a rough idea of how long money takes to double without running the full formula, divide 72 by the annual interest rate. At 8% annual growth, 72 divided by 8 is 9, so a lump sum roughly doubles in about nine years. It's an approximation, most accurate for rates between about 6% and 10%, but useful for a quick gut check at the kitchen table without opening a spreadsheet.
Worked example
Deposit 10,000 at 7% annual interest, compounded monthly, for 10 years. The monthly rate is 0.5833%, compounded across 120 months, which grows the balance to roughly 20,097 — meaning the interest earned, about 10,097, actually exceeds the original deposit.
Stretch that same deposit to 20 years instead of 10 and the balance grows to roughly 40,387, more than doubling again — a clear illustration that the second decade of compounding contributes more absolute growth than the first, purely because there's a larger base earning interest.
Why compounding frequency matters less than people assume
Switching from annual to monthly or even daily compounding sounds significant, but for typical savings rates the difference in final balance is often small — a few tens of dollars on a 10,000 deposit over a decade. The interest rate itself and the length of time invested matter far more to the final outcome than whether interest compounds monthly or daily.
Keep the assumptions in mind
This projection assumes a constant rate and no withdrawals, which real accounts rarely deliver exactly — treat the number as a planning estimate rather than a guaranteed outcome, since actual returns fluctuate with market conditions, bank terms or fees. This tool is for illustration only and isn't financial advice, so pair it with guidance from a qualified advisor before making investment decisions.
How contributions change the picture
Many real accounts don't sit untouched — people add regular contributions on top of an initial deposit. Adding even 100 a month to the 10,000 example above, at the same 7% rate over 10 years, pushes the ending balance well past 37,000, since each new contribution gets its own runway to compound alongside the original lump sum.
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