Compound interest calculator
This compound interest calculator with monthly contributions shows how your savings grow — enter a starting amount and how much you'll add each month to see the full picture.
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Why compounding accelerates
Each period you earn interest on a bigger base — your deposits plus all past interest. That is why the second decade of saving typically earns more than the first, and the third more than both combined. The donut above shows the split at your chosen number of years: notice how the "interest earned" slice grows disproportionately larger the longer you leave the money invested.
Worked example: $1,000 start, $100/month, 7%
Over 20 years with monthly compounding at a 7% annual return:
- Monthly rate: 7% ÷ 12 = 0.583%
- Number of periods: 20 × 12 = 240 months
- Total you deposit: $1,000 + ($100 × 240) = $25,000
- Final balance: $56,131
- Interest earned: $56,131 − $25,000 = $31,131
More than half the final balance came from growth rather than deposits — and that ratio keeps tilting further toward growth the longer the money stays invested.
How the balance grows over time
Same $1,000 starting amount and $100/month at 7%, at different time horizons:
| Years | Total deposited | Interest earned | Final balance |
|---|---|---|---|
| 5 | $7,000 | $1,577 | $8,577 |
| 10 | $13,000 | $6,318 | $19,318 |
| 15 | $19,000 | $15,545 | $34,545 |
| 20 | $25,000 | $31,131 | $56,131 |
| 25 | $31,000 | $55,733 | $86,733 |
| 30 | $37,000 | $93,114 | $130,114 |
Deposits grow in a straight line ($6,000 more every 5 years), but interest earned accelerates sharply — from $1,577 in the first 5 years to an extra $37,381 in the final 5 years alone.
How much the return rate matters
Same $1,000 start, $100/month, over 20 years at different annual returns:
| Annual return | Interest earned | Final balance |
|---|---|---|
| 3% | $9,651 | $34,651 |
| 5% | $18,816 | $43,816 |
| 7% | $31,131 | $56,131 |
| 10% | $58,265 | $83,265 |
Going from 3% to 10% doesn't triple the outcome — it multiplies the interest earned six-fold, because the rate compounds against itself every period.
The Rule of 72
A quick mental-math shortcut: divide 72 by your annual return to estimate how many years it takes your money to double. At 6% that's 12 years; at 9% it's 8 years; at 12% it's just 6 years. It's not exact, but it's close enough to compare scenarios in your head.
Why starting early beats saving more
Starting early matters more than saving more: see the full explanation with examples. Someone who invests for 10 years in their 20s and then stops can end up with more money at retirement than someone who invests twice as much for 30 years starting in their 40s — purely because of extra decades of compounding.
Thinking about whether to overpay a mortgage instead of investing? Compare the two here.
What this calculator does not include
- Inflation — every figure is in nominal terms. At 3% inflation, $130,114 in 30 years has roughly the purchasing power of $53,600 today.
- Tax — investment gains may be taxable depending on the account type and your country. Tax-advantaged accounts (ISA, 401(k), Roth IRA) change the outcome significantly.
- Fees — platform and fund fees of even 1% annually compound against you the same way returns compound for you.
- Market volatility — this assumes a steady annual return. Real markets fluctuate, and the order of good and bad years matters if you're withdrawing.
Frequently asked questions
How does compound interest work?
You earn interest on your deposit plus previously earned interest — growth on growth.
What is the Rule of 72?
72 ÷ annual return ≈ years to double. At 8%, about 9 years.
How often does this compound?
Monthly — matching most savings accounts and investment growth models.
Is a higher return always better?
Higher expected returns usually come with higher risk and volatility — this calculator assumes a steady rate, but real markets fluctuate year to year.
Does this account for inflation?
No — all figures are nominal. To see the result in today's purchasing power, subtract your expected inflation rate from the return rate. A 7% return with 3% inflation is roughly a 4% "real" return.
What return rate should I use?
For a diversified stock market portfolio, 7% is a common long-run historical average before inflation. For cash savings accounts, use your account's actual rate. Lower is more conservative — the table above shows how sensitive the outcome is to this input.
Can I include monthly contributions, not just a lump sum?
Yes — enter your starting amount and a monthly contribution and this calculator with monthly contributions adds both to the compounding balance every month, alongside a lump-sum-only comparison in the results.
This calculator provides estimates for information only — not financial advice. Results will vary by lender, credit profile and market conditions. Consult a qualified financial adviser before making financial decisions.