Compound Interest Calculator

Compound interest means you earn interest not only on the money you deposit but also on the interest it has already earned. The classic formula for a single deposit is A = P(1 + r/n)^nt, where P is the principal, r the annual rate, n the number of compounding periods per year and t the number of years. Because the exponent grows with time, the curve is slow at first and steep later — the last decade of a 30-year plan often produces more growth than the first two combined.

This calculator adds a monthly contribution. It converts your rate and compounding frequency into an equivalent monthly rate, grows the balance one month at a time, and adds your contribution at the end of each month. That mirrors how most people actually save: a regular automatic transfer into an account or brokerage.

Time is the most powerful lever. Starting ten years earlier can roughly double an ending balance at typical stock-market returns. Rate matters a lot over long periods: the gap between 5% and 8% over 30 years is enormous, which is why fees of even 1% a year deserve attention. Contributions are the lever you control most directly; increasing them each time your income rises is a simple habit with a big payoff.

The rule of 72 is a quick mental check: divide 72 by the annual rate to estimate how many years it takes money to double. At 7%, that is just over 10 years. The optional inflation field converts the result into today's purchasing power so you can judge whether the goal is really enough.

Deposit $10,000 at 5% compounded monthly and leave it alone for 10 years: 10,000 × (1 + 0.05/12)¹²⁰ = $16,470. Now use the default inputs — $10,000 to start, $300 a month, 7% compounded monthly for 20 years. You deposit $82,000 in total, and the balance grows to roughly $196,700, so more than half the ending balance is interest. Set inflation to 3% and the calculator shows that balance is worth about $109,000 in today's dollars.