Compound Interest Calculator
Project savings growth with starting balance, monthly additions, rate, and time.
What it does
Compound interest means each period interest is paid on a balance that already holds past interest. Growth starts slow, then bends upward as the base gets larger. Time matters more than most people expect: extra years at the end add far more than extra dollars at the start.
The tool above projects a balance from a starting amount, a fixed monthly addition, a nominal annual rate, and a span of years. Monthly additions are treated as end of month deposits. The compounding menu sets how often interest posts within the year.
This is a planning projection. Real accounts lose part of the return to fees, taxes, and rate changes, and market accounts swing year to year. Read the result as the path of a steady rate, not as a promise.
How to use
- Enter the starting balance, or zero when starting fresh.
- Enter the amount you can add each month without strain.
- Enter the nominal annual rate. For savings, use the quoted APY as a guide. For investing, use a cautious long run average.
- Set years and compounding frequency, then compare the interest earned against total contributions.
Formula
- P
- Starting balance compounding the whole span.
- PMT
- Monthly addition at each month end.
- r / n
- Rate per compounding period from the nominal annual rate.
- nt
- Total periods: frequency times years.
The first term grows the starting amount. The second grows the stream of deposits. When compounding is not monthly, the tool converts the nominal rate to an equal monthly rate first, so yearly, quarterly, and daily choices stay consistent with monthly deposits.
Worked example
Example: $10,000 start, $200 per month, 7%, 10 years, monthly
Principal 10,000, monthly addition 200, nominal rate 7%, 120 months, monthly compounding.
- Monthly rate: 0.07 / 12 = 0.0058333.
- Growth factor over 120 months: (1.0058333)^120 = 2.0097.
- Starting amount grows to 10,000 x 2.0097 = $20,097.
- Deposits grow to 200 x (2.0097 - 1) / 0.0058333 = $34,617.
- Future value: 20,097 + 34,617 = about $54,714, from $34,000 paid in.
Reference table
| Rate | Future value | Interest earned |
|---|---|---|
| 4% | about $44,358 | about $10,358 |
| 7% | about $54,714 | about $20,714 |
| 10% | about $68,039 | about $34,039 |
Limits
- Steady rate assumed. Markets swing year to year.
- Ignores fees, taxes, and inflation unless you adjust the rate.
- End of month deposits assumed.
- Nominal versus real returns differ by inflation.
Common mistakes
- Using a stock market peak return as the everyday rate, which overstates the path.
- Ignoring fees. One percent yearly in fees removes roughly a fifth of long run growth.
- Comparing nominal rates with different compounding without converting first.
- Stopping monthly additions after a market dip, which breaks the part that matters most.
- Reading a projection as a guarantee instead of a steady rate sketch.
Try it yourself
Quick checks. Answers sit tucked under each question.
$1,000 at 5% for 10 years, no additions?
1000 x 1.05^10 = 1000 x 1.6289 = $1,628.89.
Rule of 72 at 6%: doubling time?
72 / 6 = 12 years.
Questions
Nominal rate or APY: which do I enter?
Enter the nominal annual rate and set the matching compounding frequency. For a savings account quoting APY with monthly posting, the nominal rate sits just below the APY.
Are deposits at the start or end of the month?
End of the month in this tool. Start of month timing would earn one extra month per deposit, a small gap over long spans.
Does it include taxes?
No. Interest in taxable accounts is reduced by tax each year, so after tax growth runs lower than shown.
What rate should I assume for investing?
Use a cautious long run average below past stock returns, and run a second pass one or two points lower to see the range.
Why does time beat amount?
Compounding multiplies the whole balance each period. Extra years multiply a large late balance, while extra early dollars only add once.