Compound Interest Calculator
See what your savings or investments grow into over time — retirement, index funds, or any account that earns interest. Results update as you type.
How compound interest works
Compound interest means you earn returns on your returns. Year one, you earn interest on your deposit. Year two, you earn interest on your deposit plus last year's interest. That loop repeats every year, which is why the green curve above bends upward instead of climbing in a straight line — and why the gap between what you put in and what you end up with keeps widening.
Why time beats amount
Someone who invests $200/month from age 25 to 35 and then stops typically ends up with more at 65 than someone who invests $200/month from 35 all the way to 65 — despite putting in a third of the money. The first decade of compounding does the heaviest lifting. The practical takeaway: starting small today beats starting big later.
The formula behind the calculator
Where P is your initial deposit, r the annual rate (as a decimal), n the compounding periods per year (12 for monthly), t the years, and PMT your contribution per period. The first term grows your starting amount; the second term grows every contribution from the month it was made.
A useful shortcut is the Rule of 72: divide 72 by your rate to estimate the doubling time. At 8%, money doubles roughly every 9 years — the "Money doubles in" figure above uses the exact logarithmic version of this.
Common questions
What return rate should I use?
Depends on where the money sits. A high-yield savings account: 3–5%. A broad stock index fund: historically ~7% per year after inflation (~10% before), averaged over decades. Individual stocks or crypto: anything — which is exactly why long-term planning usually assumes a diversified index, not a lucky pick. When in doubt, run the calculator at 5% and 8% and treat the range as your realistic outcome.
Is compound growth guaranteed?
Only for fixed-rate products like savings accounts and CDs. Market investments compound on average — some years are negative. Over 20+ years the average has been remarkably steady historically, but any single year can swing wildly. Never use this calculator's output as a promise; use it as a planning estimate.
Does monthly vs. yearly compounding matter much?
Less than people think. $10,000 at 7% for 20 years: yearly compounding gives $38,697, monthly gives $40,387 — about 4% more. The rate and the time horizon matter far more than the frequency. (This calculator compounds monthly, which matches most savings accounts and funds.)
What about inflation and taxes?
Both quietly eat returns. At 3% inflation, money loses half its purchasing power in ~24 years, so a 7% nominal return is roughly 4% in real terms — enter 4% in the calculator to see inflation-adjusted results. Taxes vary by country and account type; tax-sheltered accounts (401k, ISA, ISK, etc.) let the full return compound untouched, which compounds the advantage itself.