Compound Interest Calculator
This calculator shows how money grows through compound interest, the engine of long-term savings. You supply a starting balance, an annual interest rate, how often interest compounds (monthly, daily, etc.), and optional regular monthly contributions. The tool computes your projected balance after a given number of years, breaking down how much came from your contributions and how much from interest earned. A year-by-year table shows balance growth period by period, making the compounding effect visible. The calculator uses standard formulas from the CFPB, handling both lump-sum and periodic contributions seamlessly. Understand how compounding frequency affects your returns, how much your regular deposits matter versus interest, and use the Rule of 72 approximation to mentally estimate doubling time. This is essential for planning savings goals, comparing high-yield savings accounts, or modeling retirement contributions to 401(k)s and IRAs.
Starting with $10,000, adding $200/month for 20 years at 7% compounded monthly: projected balance of --. Total contributed: --. Total interest: --.
Year-by-year growth
| Year | Balance | Contributions to date | Interest to date |
|---|
How compound interest is calculated
The future value combines growth on the initial principal and growth on any regular contributions. Both use the same compound-interest formula, with the contribution component using the standard future-value-of-an-annuity formula.
r = annual rate / 100 / n (compounding periods per year)
t_periods = years x n
FV (principal) = P x (1 + r)^t_periods
FV (contributions) = PMT x ((1 + r)^t_periods - 1) / r
Total FV = FV (principal) + FV (contributions)
Worked example
$10,000 initial, $200/month, 7% annual rate, monthly compounding, 20 years:
- r = 7 / 100 / 12 = 0.005833
- t_periods = 20 x 12 = 240
- FV (principal) = 10,000 x (1.005833)^240 = approximately $40,065
- FV (contributions) = 200 x ((1.005833)^240 - 1) / 0.005833 = approximately $104,367
- Total FV = approximately $144,432
- Total contributed = $10,000 + ($200 x 240) = $58,000
- Total interest = $144,432 - $58,000 = approximately $86,432
Compounding frequency explained
Compounding frequency determines how often interest is calculated and added to the balance. More frequent compounding means each period's interest starts earning its own interest sooner.
| Frequency | Periods/year (n) | $10,000 at 7% after 1 year |
|---|---|---|
| Annually | 1 | $10,700.00 |
| Semi-annually | 2 | $10,712.25 |
| Quarterly | 4 | $10,718.59 |
| Monthly | 12 | $10,722.90 |
| Daily | 365 | $10,725.01 |
Figures are illustrative (no additional contributions). Values based on the standard compound-interest formula.
The Rule of 72
Divide 72 by the annual interest rate to estimate doubling time. At 7%, 72 / 7 = approximately 10.3 years. The rule is a mental-math shortcut that becomes less accurate at very high or very low rates. For exact projections, use the calculator above.
Compound interest: frequently asked questions
What is compound interest?
Compound interest is interest earned on both the original principal and the accumulated interest from prior periods. Each compounding period the interest earned is added to the balance, so the next period's interest is calculated on a larger amount. The more frequently interest compounds, the faster the balance grows.
How does compounding frequency affect growth?
More frequent compounding (monthly vs. annually) produces slightly more growth due to interest-on-interest effects within the year. For example, $10,000 at 7% compounded annually grows to $10,700 after one year; compounded monthly it grows to about $10,722.90. The difference between monthly and daily compounding is small in practice but meaningful over long periods.
What is the Rule of 72?
Divide 72 by the annual interest rate to estimate how many years it takes to double your money. For example, 72 / 7 = approximately 10.3 years at 7%. It is a quick mental-math approximation, not a financial guarantee, and it assumes no additional contributions. For precise projections use this calculator.
What is a real interest rate vs. a nominal interest rate?
The nominal rate does not account for inflation; the real rate does. A 7% nominal return with 3% inflation gives a real return of approximately 4%. The CFPB discusses the relationship between inflation and savings at consumerfinance.gov. This calculator uses nominal rates; subtract your expected inflation rate for a rough real-return estimate.
Official sources
- CFPB, Interest rates and APY: consumerfinance.gov/ask-cfpb/...
- CFPB, Saving and investing: consumerfinance.gov/consumer-tools/saving/
Reviewed by the CalculatorHub team, edited by James Graham, 12 June 2026. See our methodology. General information, not financial advice.