📈 Compound Interest Calculator
See how an initial deposit plus regular monthly contributions grows over time with compound returns.
How to use the Compound Interest Calculator
Enter your starting principal, any monthly contribution, the annual return and the number of years. The page shows year-by-year growth along with total contributions and total gains.
How it works
Compound growth follows A = P(1 + r)n. With regular contributions each instalment also compounds over the remaining period, which is why time in the market beats timing the market. Two identical investors who start ten years apart can end up with a gap of hundreds of thousands of dollars purely from the extra compounding periods.
When to use it
Use it to project retirement savings, compare a lump sum against a monthly contribution plan, and see how much a single additional year of compounding adds.
Worked example
Monthly investing of $500 at 7% over 30 years:
| Milestone | Contributed | Balance | Gain |
|---|---|---|---|
| Year 5 | $30,000 | $36,702 | $6,702 |
| Year 10 | $60,000 | $86,471 | $26,471 |
| Year 20 | $120,000 | $347,197 | $227,197 |
| Year 30 | $180,000 | $1,006,515 | $826,515 |
Assumptions and limitations
This tool assumes a constant annual return and monthly compounding. Real markets fluctuate, and inflation erodes purchasing power, so the nominal figure overstates your real buying power. Past performance does not predict future results. This is a calculator, not investment advice.
Frequently Asked Questions
What is the Rule of 72?
Divide 72 by your annual return rate to estimate how many years it takes money to double: at 8%, roughly 72 ÷ 8 = 9 years. It is a quick mental approximation of compounding.
Is 7% a realistic return?
Long-run averages for broad stock market indexes have historically been around 7% per year after inflation, but past performance never guarantees future results — actual returns fluctuate year to year.
Does compounding frequency matter?
Monthly vs daily compounding makes only a small difference at typical rates. What matters far more is time — starting years earlier beats chasing higher frequency.
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