Compound Interest Calculator
See how a starting balance plus regular monthly contributions grows over time. Change any number and the results update right away.
Show year-by-year breakdown
How compound interest works
Compound interest means you earn returns on your original money and on the returns you've already earned. In year one, $10,000 at 8% earns $800. In year two you earn 8% on $10,800, which is $864. The yearly gain keeps growing even if you never add another dollar.
Adding money every month speeds this up a lot. Each contribution starts compounding as soon as it's invested, which is why time in the market usually matters more than picking the perfect entry point.
The formula
FV = P(1 + r/n)nt + PMT × [((1 + r/12)12t − 1) / (r/12)]
Here P is your starting amount, r the annual rate, n how many times a year interest compounds, t the number of years, and PMT your monthly contribution. The calculator runs month by month, so it also handles yearly contribution increases, which the formula above can't.
What return should I assume?
Since 1926 the S&P 500 has returned roughly 10% a year on average before inflation, or about 7% after inflation. Bonds and high-yield savings accounts return less. Many planners use 6–8% for a diversified stock portfolio to stay conservative. Past returns don't guarantee future results, so try a few rates to see the range.
Common questions
How much will $10,000 grow in 20 years?
At an 8% annual return compounded monthly, $10,000 grows to about $49,268 in 20 years with no extra contributions. Add $500 a month and it reaches about $343,800.
Is monthly or annual compounding better?
More frequent compounding earns slightly more, but the gap is small. At 8%, monthly compounding works out to an effective 8.30% a year, against 8.00% for annual. How much you contribute and how long you stay invested matter far more.
Does this calculator account for taxes and fees?
No. To approximate fees, subtract them from the return. For example, use 7.8% instead of 8% for a fund that charges 0.2% a year. In a taxable account, dividends and realized gains may also be taxed.
What is the Rule of 72?
Divide 72 by your annual return to estimate how many years it takes to double your money. At 8%, money doubles about every 9 years.