KnowWiser

Money tools

Compound Interest Calculator

Project how a starting balance and steady monthly contributions grow over time. Choose the compounding frequency, see total interest earned, and follow the balance year by year.

$
$
Added at the end of each month
%
yrs
Year-by-year growth
Year Contributions to date Interest to date Balance

How this calculator works

Compound interest means each period’s interest is added to the balance, so the next period earns interest on the interest. For a single deposit the closed-form result is:

A = P · (1 + r / n)n · t
  • P = initial amount
  • r = annual rate as a decimal (7% → 0.07)
  • n = compounding periods per year (365 daily, 12 monthly, 4 quarterly, 1 annually)
  • t = years

Monthly contributions are handled by simulation: each month the balance grows by the equivalent monthly rate (1 + r / n)n / 12 − 1, then the contribution is added at month end. Summing 12 months gives each row of the table. With monthly compounding this equals the textbook future-value-of-an-annuity formula exactly.

Worked example

$10,000 to start, $200 a month, 7% compounded monthly for 10 years: the lump sum alone grows to about $20,097, and the 120 contributions grow to about $34,617. Final balance ≈ $54,714, of which $34,000 is your own money and about $20,714 is interest. Run the same inputs for 30 years and the balance reaches about $325,000 — the last decade earns more than the first two combined.

Tips to compound faster

  • Start early: time in the market beats timing. Ten extra years roughly doubles the end result at 7%.
  • Automate contributions so they happen every month, including the boring ones.
  • Mind fees and taxes — a 1% fee compounds against you the same way interest compounds for you.
  • New to the idea? Read What is compound interest? for the full explanation, or plan a systematic investment with the SIP calculator.
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Frequently asked questions

What is the compound interest formula?

For a lump sum, A = P(1 + r/n)^(nt), where P is the starting amount, r the annual rate as a decimal, n the number of compounding periods per year, and t the years. Regular contributions add an annuity term on top; this calculator handles both by simulating each month.

Does compounding frequency matter much?

Less than most people expect. At 7% for 10 years, $10,000 grows to about $19,672 with annual compounding, $20,097 with monthly, and $20,136 with daily. The rate and the time invested matter far more than how often interest is credited.

Are contributions made at the start or end of each month?

At the end of each month, after that month’s interest is credited. This is the conservative convention and matches how most automatic transfers land after payday. Start-of-month contributions would earn one extra month of interest each.

Does this account for taxes or inflation?

No. Results are nominal, pre-tax figures. In a taxable account, interest and dividends are taxed each year, which slows compounding; in a 401(k), IRA, or HSA, growth is tax-deferred or tax-free. Inflation of roughly 2–3% a year also reduces what the final balance will buy.

Can I use this for investments, not just savings accounts?

Yes, as a projection. Enter your expected average annual return (historically about 7% real, or 10% nominal, for a broad US stock index) — but remember investment returns vary year to year, while this calculator assumes a steady rate.