Compound Interest Calculator
How your savings grow over time
Saving or investing? Enter a starting balance, monthly contribution, expected return and time horizon to see how compounding grows your money.
Growth takes over from contributions
Used as an investment calculator or a savings growth calculator, the interesting output is not the final balance but where it comes from.
Compound interest means you earn returns on your past returns, not just on what you put in. The interesting thing is not that it grows — it is when the growth starts to dominate.
| After | You contributed | Growth | Balance | Growth share |
|---|---|---|---|---|
| 5 years | $40,000 | $9,973 | $49,973 | 20% |
| 10 years | $70,000 | $36,639 | $106,639 | 34% |
| 20 years | $130,000 | $170,851 | $300,851 | 57% |
| 30 years | $190,000 | $501,150 | $691,150 | 73% |
| 40 years | $250,000 | $1,225,521 | $1,475,521 | 83% |
The crossover happens somewhere around year 17: before that, most of the balance is money you deposited; after it, most is money the money earned. By year 40 your own contributions are barely a sixth of the total. This is the entire argument for starting early, and it is why the last decade of a long investment looks so implausible from the first.
Why the rate matters more than it looks
| Annual return | Balance after 20 years |
|---|---|
| 0% (cash under the bed) | $130,000 |
| 3% | $182,359 |
| 5% | $232,643 |
| 7% | $300,851 |
| 9% | $394,035 |
| 11% | $522,169 |
Two extra percentage points from 7% to 9% adds $93,184 on identical contributions. Which cuts both ways: a 1% annual fund fee is not a 1% cost, it is a permanent 1% cut to the compounding rate, and over 20 years that is roughly $40,000 of this balance. Fees are the one part of the return you can actually control.
The rule of 72
Divide 72 by your annual return to estimate how long money takes to double. It is accurate enough for mental arithmetic anywhere between about 4% and 12%.
| Return | Doubles in | Doublings in 40 years |
|---|---|---|
| 2% | 36 years | 1.1 |
| 4% | 18 years | 2.2 |
| 6% | 12 years | 3.3 |
| 7% | 10.3 years | 3.9 |
| 8% | 9 years | 4.4 |
| 10% | 7.2 years | 5.6 |
The last column is the one to sit with. At 6% a lump sum doubles just over three times in forty years, becoming roughly 10×. At 10% it doubles more than five times, becoming about 49×. Four percentage points is not a 50% better outcome — it is a five times better one.
Nominal returns are not real returns
Every figure above is nominal: it ignores inflation. If your money grows 7% while prices rise 3%, your buying power grows by roughly 4%, and the $300,851 balance above buys what about $166,000 buys today.
This is the single most common way long-term projections mislead. Two honest ways to handle it:
- Use a real return. Enter 4 or 5% instead of 7 and read the result as today's money. Simple and hard to misread.
- Use a nominal return and discount at the end with the inflation calculator. More precise if your contributions will rise with inflation too.
Whichever you pick, be consistent: a nominal return with today's-money goals is the mismatch that makes retirement plans look funded when they are not. The retirement calculator shows both figures side by side.
Compounding frequency, and what "7%" actually means
This calculator compounds monthly, which suits a monthly contribution schedule. Frequency matters far less than people expect: $10,000 at 7% for 20 years is $38,697 compounded annually and $40,387 compounded monthly — about 4% apart, against the enormous differences that time and rate produce.
On what rate to assume: the broad US stock market has averaged roughly 10% nominal and about 7% after inflation over the long run, but that average conceals decade-long stretches of very little and sharp falls along the way. A projection is a planning tool, not a forecast, and the sequence of returns near the end matters as much as the average.
Estimate only — returns vary and are not guaranteed. This is general information, not financial advice.
How this compound interest calculator works out its numbers
Future value is P(1+r)ⁿ + C×((1+r)ⁿ − 1)÷r, where P is the starting amount, C the monthly contribution, r the monthly rate (annual ÷ 12) and n the number of months. Contributions are added at the end of each month.
- Monthly compounding to match the monthly contribution schedule. Annual compounding gives a figure about 4% lower over 20 years at 7%.
- Nominal returns. No inflation adjustment is applied, so results are in future dollars. Enter a real return of 4 to 5% instead if you want today's money.
- Constant rate and contribution. Real returns vary year to year and the sequence matters, particularly near the end of a long horizon. Contributions are held flat, so anyone increasing them with inflation will do better than shown.
- No fees or taxes. Subtract your expense ratio from the return you enter. Tax treatment depends entirely on the account type.
- The rule of 72 is an approximation, accurate to within about a year between 4% and 12%.
Reviewed September 2026.
Figures reviewed . Every worked example on this page is checked against the calculator above.
Compound Interest Calculator: frequently asked questions
How does compound interest work?
Each period's earnings are added to the balance, so the next period earns on a larger amount. Growth accelerates: on $10,000 plus $500 a month at 7%, growth is 20% of the balance after five years and 83% after forty.
When does investment growth exceed contributions?
Around year 17 in the default scenario. Before that most of the balance is money you deposited; after it, most is money the money earned. By year 40 your contributions are barely a sixth of the total.
What return should I assume?
Roughly 7% after inflation is a common planning figure for a stock-heavy portfolio, or about 10% nominal. Both conceal decade-long stretches of poor returns, so treat any projection as a plan rather than a forecast.
What's the rule of 72?
Divide 72 by your annual return for the years money takes to double. At 7% that is 10.3 years. Over 40 years, 6% gives just over three doublings and 10% gives more than five, so a four-point gap is a five times better outcome.
How much do investment fees cost me?
A 1% annual fee is a permanent 1% cut to your compounding rate, not a one-off 1%. On $10,000 plus $500 a month over 20 years, the difference between 7% and 6% is about $40,000.
Should I use a nominal or real return?
Either, but be consistent. Enter 4 to 5% for a real return and read the result as today's money, or use 7% nominal and discount the result for inflation afterwards. Mixing a nominal return with today's-money goals is how plans look funded when they are not.
Does compounding frequency matter much?
Far less than time or rate. $10,000 at 7% for 20 years grows to $38,697 compounded annually and $40,387 compounded monthly, about 4% apart. This calculator compounds monthly to match monthly contributions.
Is it better to start early or save more?
Start early, usually by a wide margin. Someone contributing $500 a month from 25 to 65 ends with far more than someone contributing the same from 35, because the earliest dollars get the most doublings.