Compound Interest Calculator
See how money can grow over time through compound interest. Adjust the rate, timeline, and contributions — and watch the growth chart respond instantly.
Projected growth
$124,379.03
after 20 years at 7%
You put in
$53,000.00
Interest earned
$71,379.03
Growth multiple
2.35×
What if the rate were different?
Estimates only. Actual investment returns vary and may be negative. This calculator ignores taxes, fees, and inflation — see the explanation below.
What compound interest is
Compound interest means earning returns on both your original money and all previously earned returns. Each period, the balance that earns interest grows — so growth accelerates. It is the difference between a straight ramp (simple interest) and an upward-bending curve.
How compound interest works
With $1,000 at 10% compounded annually: year one earns $100 (balance $1,100). Year two earns 10% of $1,100 = $110. That extra $10 is interest earning interest. By year 10 the balance is $2,593.74 — $1,593.74 of growth on a $1,000 start, with the curve steepening every year.
Compounding frequency (annual, monthly, daily) changes how often interest is credited. More frequent compounding grows slightly faster, but the effect is small next to rate, time, and contributions — try switching frequencies in the calculator to see how little moves.
Compound vs. simple interest
Simple interest always computes on the original principal: $5,000 at 6% earns $300 every year, reaching $14,000 after 30 years. Compounded annually at the same rate, it reaches $28,717 — more than double, with the gap itself exceeding the original $5,000 principal.
| Year | Simple (6%) | Compound (6%) | Gap |
|---|---|---|---|
| 5 | $6,500 | $6,691 | $191 |
| 10 | $8,000 | $8,954 | $954 |
| 20 | $11,000 | $16,036 | $5,036 |
| 30 | $14,000 | $28,717 | $14,717 |
Why time matters
Because each year multiplies all previous growth, early years are the most valuable. The calculator’s “what-if” panel shows rate sensitivity — but try this: with $200/month at 7%, 30 years reaches roughly $227,000 while 20 years reaches only about $104,000. Same habit, less than half the result, from starting a decade later.
Rule of 72
The effect of regular contributions
Contributions often matter more than rate-chasing. At 7% over 20 years, $5,000 left alone grows to about $19,300. Add $200/month and the total passes $109,000 — with growth exceeding total contributions. Every deposit starts its own compounding clock the day it arrives.
Real-world examples
| Scenario (7%, monthly contrib.) | You put in | Growth | Future value |
|---|---|---|---|
| $1,000 + $100/mo × 10 yrs | $13,000 | ~$4,400 | ~$17,400 |
| $5,000 + $200/mo × 20 yrs | $53,000 | ~$56,000 | ~$109,000 |
| $10,000 + $500/mo × 30 yrs | $190,000 | ~$397,000 | ~$587,000 |
Estimates, not promises: calculations assume a smooth constant rate and ignore fees, taxes, inflation, and volatility. Actual investment returns vary and may be negative. Past performance never guarantees future results.
Frequently asked questions
How do you calculate compound interest?
Without contributions: balance = principal × (1 + rate)^years. With regular contributions the math compounds each deposit separately — the calculator above handles monthly or annual contributions with any compounding frequency.
What’s the difference between compound and simple interest?
Simple interest pays only on the original principal; compound interest pays on principal plus accumulated interest. Over decades at the same rate, compound growth can be multiples of simple growth.
How fast does money double?
Use the Rule of 72: divide 72 by the annual rate. At 7%, money roughly doubles every 10.3 years; at 6%, every 12 years.
Are these projections guaranteed?
No. Calculations are estimates assuming a constant rate. Actual investment returns vary, may be negative, and are reduced by fees, taxes, and inflation.
Do monthly contributions really matter that much?
Enormously — often more than the rate. At 7% over 20 years, $200/month contributes $48,000 but produces roughly $56,000 of growth on top, dwarfing what a small lump sum alone would earn.
Educational information only. For educational and informational purposes only. This website does not provide personalized financial, investment, tax, or legal advice.