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Compound Interest Calculator

See how your money grows when interest earns interest, and what your future balance is really worth.

$
$
30 yr
7%

7% is a reasonable long-term real-return assumption for stocks.

2.5%

Future value

$406,574

After 30 years

You contributed
$113,000
Interest earned
$293,574
In today's dollars
$193,831

Calculations stay in your browser, nothing is sent or saved.

YearContributedBalance
1$8,600$9,079
5$23,000$28,566
9$37,400$54,329
13$51,800$88,388
17$66,200$133,417
21$80,600$192,947
25$95,000$271,649
29$109,400$375,697
30$113,000$406,574

How to Use This Calculator

  1. Enter your starting balance. Use the current value of the account you're projecting, IRA, brokerage, savings.
  2. Set a realistic monthly contribution. One you can sustain through bad months, not your best-case number.
  3. Pick a return rate that matches the asset. 6–7% for diversified stocks, 1–2% for bonds, ~5% for high-yield savings today.
  4. Read both the future value and the today's-dollars number. The second one is the truth about purchasing power.

Compound Interest: The Most Important Concept in Finance

Compound interest is the engine that turns ordinary saving into serious wealth. The mechanics are simple: every period, your previous earnings get added to the principal and start earning their own interest. Over a decade or two, that snowball gets large enough to outpace your contributions entirely, your money starts doing more work than you do.

Why time matters more than the amount

A 25-year-old who invests $300/month for 10 years and then stops will out-earn a 35-year-old who invests $300/month for 30 years . if both earn 7%. The first contributed $36,000 and ends with ~$540,000 by age 65. The second contributed $108,000 and ends with ~$367,000. The early starter wins despite contributing a third as much. This is why "start now" beats "start big."

Nominal vs real returns

A 7% nominal return with 3% inflation is a 4% real return. Always plan in real terms, otherwise you'll project a $1M balance and discover it buys what $500K buys today. The toggle in this calculator does that math for you.

What rate is realistic?

Long-run US stock returns have averaged ~10% nominal and ~7% real. Bonds have averaged ~5% nominal and ~2% real. Cash and savings accounts usually lose to inflation. A balanced 70/30 portfolio can reasonably plan on 6% real. Don't use 10% in real-dollar plans, you'll undersave and underestimate the work needed.

The two levers you control

You can't control market returns. You can control two things: how much you save, and how long you let it grow. Increasing your monthly contribution by $100 has a bigger effect than chasing higher returns, because higher returns come with higher risk and bigger drawdowns. Boring, automated, decades-long contributions to a low-cost index fund is how almost everyone who ends up wealthy actually gets there.

A note on fees

A 1% annual fee sounds tiny, but over 30 years it can eat 25% of your final balance. This is why low-cost index funds (0.03–0.10% expense ratios) crush actively managed funds for most investors. Subtract any expected fees from your assumed return when modeling.

How it works

Compound interest is the engine behind every long-term wealth plan: each period, the interest your balance earned gets added to the principal, and the next period's interest is calculated on the new, larger balance. The Compound Interest Calculator runs that loop forward for as many years as you choose, layering in regular contributions so you can see the difference between a one-time deposit and a habit.

Three inputs do the heavy lifting: the starting balance, the regular monthly contribution, and the annual rate of return. Years to grow stretches the curve out, and because returns compound exponentially, the back half of a 30-year run produces far more growth than the front half. That's the lesson Albert Einstein supposedly called 'the eighth wonder of the world'; the math is unforgiving in both directions.

Use the calculator to test scenarios rather than predict the future. A 7% nominal return roughly matches the U.S. stock market's long-run real return plus inflation, but real markets deliver that average through gut-wrenching annual swings. Run the same plan at 5%, 7%, and 9% to see the range of plausible outcomes, then pick a contribution rate that lets the worst-case path still land you somewhere you can live with.

The formula

Future value with monthly contributions

FV = P × (1 + r/n)^(n·t) + C × [((1 + r/n)^(n·t) − 1) ÷ (r/n)]
FV
Future value at the end of the holding period
P
Starting principal (initial deposit)
C
Regular contribution per compounding period
r
Annual interest rate (decimal, 0.07 for 7%)
n
Compounding periods per year (12 for monthly)
t
Number of years invested

When to use this

  • Sizing a retirement contribution to hit a target nest egg at age 60–67.
  • Comparing a one-time lump sum vs. dollar-cost-averaging the same amount over 12 months.
  • Showing kids or partners how a $200/month habit becomes a six-figure balance in 30 years.
  • Stress-testing a savings plan against low (4%), base (7%), and stretch (9%) return scenarios.

Limitations

  • Uses a single constant return, real markets compound through 30–50% drawdowns that affect sequence-of-returns risk.
  • Ignores taxes (capital gains, dividends, ordinary income on bond yields). Returns inside a Roth IRA differ from a brokerage account by 1–2% per year.
  • Inflation isn't modeled separately. A 7% nominal return at 3% inflation is a 4% real return, adjust if you care about purchasing power.
  • Doesn't account for fees. A 1% expense ratio shaves roughly 25% off a 30-year terminal balance, model 6% if you pay 1% in fees on a 7% gross return.

Sources

Methodology and editorial standards: our methodology · fact-checking policy.

Frequently Asked Questions

What rate of return should I assume?
For a diversified U.S. stock portfolio over 20+ years, 6–8% nominal is a reasonable planning range. Use 7% as a default and stress-test at 5% and 9% to see the spread.
How often does interest actually compound?
Savings accounts typically compound daily and pay monthly. Investments compound continuously through price changes. For long-term planning, monthly compounding is close enough.
Does this account for inflation?
No, outputs are nominal dollars. Subtract roughly 2–3% from your return assumption (so use 4% instead of 7%) if you want a real-purchasing-power result.
What's the difference between simple and compound interest?
Simple interest pays only on the original principal. Compound interest pays on principal plus accumulated interest, so the balance grows exponentially rather than linearly.
Why are my early years so flat?
Most compound-interest growth comes in the last third of the holding period. Don't quit at year 5 because the chart looks slow, the curve bends sharply upward after year 15–20.
Should I include employer 401(k) match in contributions?
Yes, match is part of your total monthly deposit. Add it to your personal contribution before entering the figure here.

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