Compound Interest Calculator
See what regular saving turns into, and how much of it is growth rather than your own money.
- Starting amount$0
- Total contributed$0
- Interest earned$0
- Final balance$0
Return-rate scenarios
Long-term growth is very sensitive to the return you earn. Here is the same plan at a lower and higher rate.
Year by year
| Year | Contributed | Interest | Balance |
|---|
Contributions are added at the end of each period. Figures are nominal (not adjusted for inflation) unless labelled, and do not include taxes or fees. Illustration only, not investment advice.
How compounding actually works
Simple interest pays you only on the money you put in. Compound interest pays you on the money you put in plus all the interest you have already earned. That second part is what makes the growth curve bend upward instead of running in a straight line.
The effect is modest in the early years and dramatic in the late ones. In the year-by-year table, notice how much interest accrues in the final year compared with the first. That final-year figure is usually several times larger, and it is earned without you contributing anything extra.
What return should you enter?
This depends entirely on where the money sits, and the difference between the options is enormous over twenty years.
- High-yield savings account: tracks short-term interest rates, so it moves with central bank policy. Your principal is protected and insured up to the coverage limit.
- Certificates of deposit: a fixed rate locked for a set term, usually slightly above savings rates in exchange for giving up access.
- Broad stock index funds: the long-run historical average after inflation is roughly 7 percent, but individual years have ranged from around −37 to +38 percent. Past performance does not predict future returns.
A word of caution: compound interest calculators draw a smooth, confident line. Real investment returns do not arrive that way, and the order in which good and bad years occur matters a great deal when you are withdrawing money. Treat the result as a rough scale, not a forecast. The return-rate scenarios above show how much the outcome changes with a slightly lower or higher return.
Inflation and today’s money
The main figures are nominal, meaning they are not adjusted for inflation. If prices rise 2.5 percent a year, a balance of $500,000 in twenty years buys roughly what $305,000 buys today. The “In today’s money” figure does this adjustment for you using the inflation rate you enter.
Compound Interest FAQs
Quick answers about returns, compounding and contributions.
Does compounding frequency make a big difference?+
Less than most people expect. Moving from annual to monthly compounding at 7 percent adds roughly 0.23 percentage points of effective annual return. Moving from monthly to daily adds almost nothing. The rate and the length of time matter far more.
When are contributions added?+
At the end of each period, which is the standard and more conservative convention. Contributing at the start of each period would produce a slightly higher balance.
Does this account for taxes or fees?+
No. Returns in a taxable account are reduced by taxes on gains and dividends, and fund fees reduce them further. To approximate this, subtract your expected fee and tax drag from the return rate before entering it.
Is my information saved?+
No. Everything is calculated in your browser and nothing is sent to a server.
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