Free money tool
Compound Interest Calculator
See how a starting balance and regular contributions could grow through the power of compounding.
Compound interest results
Your growth projection will appear here
Enter your numbers to see the projected balance, deposits, interest and year-by-year growth.
Projected final balance
$0.00
After 0 yearsBalance over time
Projected balance compared with your deposits- Balance
- Deposited
View year-by-year breakdown
| Year | Starting balance | Deposited | Interest | Ending balance |
|---|
Important: This is an educational estimate using a fixed rate. It does not account for taxes, fees, inflation or changing market returns.
How to Use the Compound Interest Calculator
Follow these steps to create your projection:
- Enter the amount of money you are starting with.
- Add the annual interest rate you want to calculate.
- Choose how many years the money will remain invested or saved.
- Select how frequently the interest compounds.
- Enter any recurring contribution you plan to make.
- Select how frequently those contributions will be added.
- Choose whether contributions are added at the beginning or end of each period.
- Select your preferred currency.
- Press “Calculate growth” to view your results.
You can adjust the inputs and calculate again to compare different contribution amounts, rates and time horizons.
Understanding Your Results
The calculator provides several figures to help you understand the projection.
Projected Final Balance
This is the estimated amount you could have at the end of the selected period. It includes your initial deposit, recurring contributions and compound interest.
Total Deposited
This includes the initial amount plus every recurring contribution added during the selected period. It represents the money you personally contributed before interest.
Interest Earned
This is the difference between the projected final balance and the total amount deposited. It shows how much of the final balance came from compound growth.
Effective Annual Rate
The effective annual rate reflects the effect of the selected compounding frequency. When the same nominal annual rate is used, more frequent compounding generally results in a slightly higher effective annual rate.
Year-by-Year Breakdown
The annual table shows your starting balance, new deposits, interest earned and ending balance for each year. You can download this information as a CSV file for use in a spreadsheet.
What Is Compound Interest?
Compound interest is interest calculated on both your original balance and previously accumulated interest. Investor.gov defines it as interest paid on the principal and accumulated interest. This differs from simple interest, which is calculated only on the original amount.
As interest is added to your balance, future interest calculations use the larger balance. This creates a compounding effect that can become increasingly noticeable over longer periods.
For a more complete explanation, read What Is Compound Interest and How Does It Work?.
Compound Interest Calculation Example
Suppose you begin with $10,000 and contribute another $200 at the end of every month. You estimate a fixed annual interest rate of 6%, compounded monthly, and leave the money growing for 20 years.
| Input | Amount |
|---|---|
| Initial amount | $10,000 |
| Monthly contribution | $200 |
| Annual interest rate | 6% |
| Compounding frequency | Monthly |
| Time horizon | 20 years |
The estimated results would be:
| Result | Amount |
|---|---|
| Total deposited | $58,000 |
| Interest earned | $67,510.22 |
| Projected final balance | $125,510.22 |
| Effective annual rate | 6.17% |
In this example, the interest earned eventually becomes greater than the total amount contributed after the initial deposit and monthly additions. This illustrates why time and consistency can have such a significant effect on compound growth.
The example assumes a fixed rate and does not include taxes, investment fees, inflation or changing market returns.
How Compounding Frequency Affects Growth
Compounding frequency determines how often earned interest is added to the balance. Common options include:
- Annually
- Semiannually
- Quarterly
- Monthly
- Weekly
- Daily
When interest compounds monthly, it is added to the balance 12 times per year. Daily compounding adds interest more frequently.
Using a more frequent compounding schedule can produce a slightly larger final balance when the same nominal annual rate is used. However, the difference is often smaller than the effect of increasing your contribution amount or extending the time horizon.
If a savings product provides an annual percentage yield, or APY, remember that the stated APY may already include the effect of compounding. Check how the financial institution presents its rate before entering it into the calculator.
Why Starting Earlier Matters
Time gives previously earned interest more opportunities to generate additional interest. Starting with a smaller amount today can sometimes produce a better long-term result than waiting several years to begin with a larger amount.
You can test this inside the calculator by comparing the same starting balance over 10, 20 and 30 years. The growth is not linear because the amount generating interest becomes larger over time.
Starting early does not mean you need a large initial investment. Small but consistent contributions can build momentum over a long period. Read How to Invest With Little Money for practical ways to begin with a smaller amount.
Why Recurring Contributions Make a Difference
Compound interest is only one part of long-term growth. Regular contributions can have an equally important effect, especially during the early years.
For example, contributing $200 every month adds $2,400 per year to your balance. Those contributions can then begin generating their own compound growth.
This approach is similar to dollar-cost averaging, where a consistent amount is invested on a regular schedule. Dollar-cost averaging does not guarantee a profit, but it can help establish a disciplined investment routine.
Beginning Versus End-of-Period Contributions
The calculator lets you choose when contributions are added.
Beginning-of-period contributions are added before that period’s growth is calculated. Each contribution receives slightly more time to compound.
End-of-period contributions are added after the period’s growth. This is a more conservative assumption and may better reflect contributions made after receiving a paycheck.
The difference may appear small over one year, but it can become more noticeable across several decades.
How to Create a More Realistic Projection
A compound interest calculation is only as realistic as the assumptions entered. Consider the following when creating your projection:
Test Multiple Interest Rates
Investment returns are not fixed or guaranteed. Calculate conservative, moderate and optimistic scenarios instead of relying on one rate.
Use an Affordable Contribution
Enter an amount you could realistically contribute on a consistent basis. An ambitious contribution that you cannot maintain will not provide a useful projection.
Account for Fees and Taxes
Management fees, account charges and taxes can reduce actual returns. The calculator does not automatically deduct these costs.
Consider Inflation
The calculator shows future monetary value without adjusting for inflation. A projected balance of $100,000 in 20 years may have less purchasing power than $100,000 today.
Avoid Treating the Result as a Guarantee
Savings-account rates can change, while investment returns fluctuate and may be negative during certain periods. The results are mathematical projections, not guaranteed outcomes.
If you plan to invest, spreading money across different investments can help manage concentration risk. Learn more in our guide to building a diversified investment portfolio.
Frequently Asked Questions
What interest rate should I enter?
For a savings account or fixed-rate product, use the stated nominal annual interest rate when available. For an investment projection, use a reasonable hypothetical return and test several different rates. Past market performance does not guarantee future results.
Does the calculator include my initial deposit?
Yes. Total deposited includes your initial amount and all recurring contributions made during the selected period.
Does the calculator account for inflation?
No. Results are shown in future monetary value and are not adjusted for changes in purchasing power.
Are taxes and investment fees included?
No. The calculator does not automatically subtract taxes, management fees, trading costs or other charges.
Which compounding frequency should I choose?
Use the frequency provided by your savings account, investment product or financial agreement. If you are creating a hypothetical investment projection, monthly or annual compounding can provide a straightforward estimate.
Is daily compounding always better than monthly compounding?
Daily compounding can produce a slightly higher result when the same nominal rate is used. However, the difference is often modest compared with changing the contribution amount, interest rate or investment period.
Does the calculator guarantee how much my investment will grow?
No. It calculates a mathematical projection using the values entered. Actual investment returns can vary and may include losses.
Is my financial information stored?
No. The calculation happens directly in your browser. The values entered into the calculator are not stored by the tool.
Explore More Free Financial Calculators
Visit the CashNStash calculators page to explore all available financial tools.
You can also use the 50/30/20 Budget Calculator to divide your take-home income or the Hourly Wage to Salary Converter to estimate annual, monthly and weekly earnings.
This calculator is provided for educational and illustrative purposes only. It does not constitute financial, investment, tax or legal advice.