Compound Interest Calculator
See exactly how your money grows over time — no finance degree needed.
Model compound growth with configurable contribution frequency and inflation adjustment.
How compound interest works
Compound interest means your returns generate their own returns. You earn on the original amount and on every gain that came before it. The longer that cycle runs uninterrupted, the more the later years dwarf the earlier ones. The rate matters, but time is the real variable.
Starting a decade earlier with the same monthly contribution typically produces a dramatically larger balance than starting later with more money. Adjust the inputs above and watch where the curve bends.
The mechanics are straightforward. A principal earns a rate, that rate gets added to the principal, and the next period's interest is calculated on the new total. Repeat for decades. What looks modest at 7% annually becomes genuinely transformative at 30 years, not because the rate changed, but because the base it operates on has grown continuously.
Compounding frequency matters, though less than most people expect. The jump from annual to monthly compounding adds real basis points. Daily compounding beyond that is largely cosmetic, as the effective annual rate converges quickly. What matters far more is the rate itself and the time horizon.
That last formula is the one most calculators quietly skip. A 7% nominal return during a 4% inflation environment leaves you with roughly 2.9% in real terms. Over 30 years the gap between nominal and real is not a rounding error. It can represent hundreds of thousands of dollars of purchasing power that never materialized. Run the inflation rate field against your expected return and read the inflation-adjusted figure, not the headline number.
Compound interest calculator: common questions
How does the compound interest calculator work?
Enter a starting amount, monthly contribution, annual rate, and time horizon. The calculator compounds each monthly addition forward at the rate you set and shows your nominal final balance, total contributions, growth earned, and inflation-adjusted value. Switch to Pro mode to set compound frequency and a tax rate on gains.
What's the difference between daily, monthly, and annual compounding?
Compounding frequency determines how often earned interest is added back to the principal. Monthly adds returns 12 times a year so each month's gains earn returns the next month. The jump from annual to monthly compounding adds real basis points. Daily compounding beyond that produces very little additional gain — the effective annual rate converges quickly above monthly.
What annual return rate should I use?
The S&P 500 has averaged roughly 10% annually since 1957. A more conservative estimate after inflation is 6–7%. Use 10% to model historical market performance, 7% for a moderate assumption, or 5% for a conservative stress-test. For savings accounts and CDs, enter the current APY from your institution.
What does the inflation-adjusted figure mean?
The nominal final balance is what the account says. The inflation-adjusted figure is what that balance is actually worth in today's purchasing power. If you're projecting 20 years out at 3% inflation, the gap between the two numbers is substantial — often hundreds of thousands of dollars. Plan against the inflation-adjusted figure, not the nominal one.
Can I use this for a savings account or CD?
Yes. Set the annual rate to your account's APY and the compound frequency to match how your bank compounds — usually daily or monthly. The starting amount is your current balance and the monthly contribution is what you plan to add each month. The result is your projected balance at any time horizon you set.