Compound Interest Calculator
Project the future value of savings or investments with compound growth — enter a starting balance, monthly contributions, expected annual return and timeframe.
How to use the compound interest calculator
- Enter what you already have invested or saved as the starting balance.
- Add the amount you can invest each month — even small recurring amounts matter over long horizons.
- Use a realistic annual return: long-run stock index averages are around 7% after inflation; savings accounts are much lower.
- Compare the 10-year and full-term balances to see how much the last years are worth.
Formula
About this calculator
Compound interest means your interest earns interest. Unlike simple growth, the curve bends upward: the same contribution in year 1 and year 15 produces wildly different absolute gains, because early money compounds through every later year. This is why starting earlier almost always beats contributing more later.
A useful mental shortcut is the Rule of 72: divide 72 by your annual return to estimate doubling time. At 7%, money doubles roughly every 10.3 years; at 10%, about every 7.2 years. The gap between those two rates, sustained over 30 years, is the difference between a modest and a life-changing balance.
Be careful with the return input. Projecting 12% because a bull market delivered it recently is the most common way people build plans that fail. A conservative rate that you can actually sustain produces better decisions than an optimistic one that merely produces bigger numbers.
Frequently asked questions
What return should I use?
For diversified stock index funds, 6–8% nominal is a common long-run planning figure. Use lower figures for bonds or savings accounts, and remember inflation reduces real returns by roughly 2–3% historically.
Does compounding frequency matter much?
At typical rates, the difference between monthly and daily compounding on the same nominal rate is small (a few basis points). Contribution size and time horizon matter far more.
What is the Rule of 72?
Divide 72 by the annual return percentage to get the approximate number of years for money to double. At 6% it takes about 12 years; at 9%, about 8 years.
Should I invest a lump sum or monthly?
Historically, lump-sum investing wins about two-thirds of the time because money spends more time in the market. Monthly contributions win behaviorally because they are easier to stick with.