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Compound Interest Calculator
Interest that earns interest is how balances snowball. This compound interest calculator shows that growth on your numbers — results, chart and schedule updating the moment you move a slider, with one link to share the exact scenario.
See how this works on a $10,000 head start — 3 real examples
Balance after 20 years
$0
You put in
$0
Interest earned
$0
Growth multiple
1.0×
Same ending balance either way — only the share each stretch of years claims.
- — If each third of the years built an equal share
- —
- —
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Growth over time
Year-by-year growth
| Year | Deposits | Interest | End balance |
|---|
How your compound interest is calculated
A lump sum grows by the standard compound interest formula:
A = P (1 + r/m)m·t
where P is the starting amount, r the annual rate, m the compounding periods per year and t the years. Monthly contributions are compounded at the exact effective monthly rate i = (1 + r/m)m/12 − 1(or i = er/12 − 1 for continuous compounding), so mixing, say, quarterly compounding with monthly deposits stays mathematically exact. End-of-month contributions follow the ordinary-annuity formula; start-of-month contributions earn one extra period each.
The same $10,000, three endings
Ten thousand dollars at 7%, compounded monthly. What changes the ending is not the rate — it is what gets added, and for how long.
Left alone: the money works by itself
after it grows$40,387
- The original $10,000 roughly quadruples without another dollar added.
- Growth supplies $30,387 of the ending balance — more than three times the deposit itself.
- Monthly compounding at 7% means each month's interest starts earning its own from the next month on.
Nothing more goes in after day one, and the balance still lands at four times the start.
Load this example (opens in a new tab)Adding $500 a month for 20 years
after it grows$300,851
- Deposits total $130,000 across the two decades, counting the opening $10,000.
- The ending balance, $300,851, is more than seven times what leaving the money alone produced.
- Growth contributes $170,851 — the account earned more than everything ever put into it.
The $500 habit costs $130,000 in all and comes back as $300,851.
Load this example (opens in a new tab)The same habit, ten more years
after it grows$691,150
- Ten more years of the same $500 means $60,000 more deposited — and $390,299 more at the end.
- Growth reaches $501,150, over two and a half times the $190,000 of deposits.
- The final decade adds more than the first two decades managed together.
An extra $60,000 in buys an extra $390,299 out; the decade, not the deposits, did most of it.
Load this example (opens in a new tab)Illustrations only, not financial advice. Your own rate, taxes and insurance will differ — check with a qualified financial advisor before acting on any of this.
What compound interest is, and why it becomes the eighth wonder
Compound interest is the engine behind almost every long-term wealth story. Because each period’s interest is added to your balance before the next period is calculated, growth accelerates the longer you stay invested. In the default scenario above — $10,000 to start, $500 added monthly at 7% — interest contributes more to the final balance than every dollar you deposited, even though the early years look unremarkable. That crossover is the whole point: compounding rewards patience disproportionately.
Time is the most powerful input. Doubling the rate roughly doubles the interest earned, but doubling the time far more than doubles it, because the curve steepens as the balance grows. This is why starting ten years earlier routinely beats contributing twice as much later, and why the most common regret among savers is simply not starting sooner. The chart above makes this visible: drag the years slider and watch the gap between the “total put in” line and the balance line widen.
Compounding frequency — annual, monthly, daily or continuous — matters less than most people expect. Moving from annual to monthly compounding on a 5% account adds about 0.12 percentage points of effective yield; moving from monthly to daily adds barely a hundredth more. When comparing savings accounts or CDs, look at the quoted APY, which already includes the compounding effect, and spend your attention on the rate and on fees instead.
Two habits amplify everything this calculator shows. First, automate contributions — consistency matters more than timing, and the begin/end toggle above proves the timing difference is small. Second, leave the interest alone: every withdrawal restarts part of the curve. If you are comparing scenarios, use the share button to save a link for each one, or try the related tools below for loans and savings goals.
Frequently asked questions
How does compound interest work?
Compound interest means you earn interest on your interest. Each period, the interest earned is added to your balance, and the next period’s interest is calculated on that larger balance. Over long periods this snowballs: a $10,000 deposit at 7% grows by $700 in year one, but by over $1,300 a year after a decade.
What is the compound interest formula?
For a lump sum: A = P(1 + r/m)^(mt), where P is the starting amount, r the annual rate as a decimal, m the number of compounding periods per year, and t the years. Regular contributions add a growing-annuity term on top — the full formula this calculator uses is shown in the “How this is calculated” section below.
Does daily compounding beat monthly compounding?
Only slightly. $10,000 at 5% for 10 years grows to $16,470 with monthly compounding and $16,486 with daily — a difference of about $16. Switch the compounding frequency to run this as a daily or monthly compound interest calculator and compare for yourself. Frequency matters far less than the rate, the time horizon, and how much you contribute.
Should I contribute at the beginning or end of each month?
Beginning-of-month contributions earn one extra month of interest each, so they end slightly ahead. Use the timing toggle to compare — on typical inputs the difference is under 1% of the final balance. What matters most is contributing consistently.
Is compound interest calculated on the principal or the whole balance?
On the whole balance: your original principal, all contributions to date, and all previously earned interest. That is the crux of simple interest vs compound interest — simple interest is only ever calculated on the original principal, while compound interest keeps building on the growing total.
What rate of return should I assume?
It depends on the investment. High-yield savings accounts currently pay roughly 4–5%, diversified stock portfolios have averaged about 10% per year over the long run (roughly 7% after inflation), and bonds sit in between. For planning, many people model 6–8% and treat higher numbers as optimistic.
Disclaimer: these calculators are educational tools, not financial advice. They model your inputs with published formulas, but they cannot know your full situation — for decisions with real stakes, talk to a qualified professional. Formulas and defaults last reviewed .