How this calculator works
The annual rate and compounding frequency are turned into an equivalent monthly growth rate. Each month the balance grows at that rate and your contribution is added. The effective annual yield shows what the stated rate is worth once compounding is included.
Worked example
With the example values below: Future balance, $82,705 ($36,705 in compound interest). Change any number above to run your own.
What you enter
| Input | Example |
|---|---|
| Starting amount | $10,000 |
| Monthly contribution | $200 |
| Annual interest rate | 6% |
| Years | 15 yrs |
| Compounding | Monthly |
The compound interest formula
Compound interest means you earn interest on your interest. For a single deposit the formula is A = P × (1 + r/n)^(n×t), where P is the starting amount, r is the annual rate, n is the number of times interest compounds per year and t is the number of years.
With regular contributions the calculator also adds each deposit and lets it compound from the month it's made. $10,000 at 7% compounded monthly grows to about $20,100 in 10 years and $81,200 in 30 years without any further deposits.
Why time matters more than the rate
Growth accelerates over time because each year's interest is earned on a bigger balance. In the example above, the first 10 years add about $10,100, while the last 10 add about $40,700. Starting earlier gives compounding more years to work.
The Rule of 72 is a quick check: divide 72 by the annual rate to estimate how many years it takes to double your money. At 6% that's about 12 years; at 9%, about 8 years.
Compounding frequency
The more often interest compounds, the slightly higher the effective yield. At a 5% stated rate, annual compounding gives 5.00%, monthly gives about 5.12% and daily about 5.13%. The jump from annual to monthly is noticeable; the jump from monthly to daily is small.
That's why savings accounts quote APY, which already includes compounding. When you compare investments, compare effective annual yields, not stated rates.
Where compound interest works against you
Compounding applies to debt too. Credit card interest compounds daily on most cards, which is why balances can grow quickly if you only make minimum payments. The credit card payoff calculator shows how much faster a larger payment clears the balance.
For long-term investing, use the investment calculator or the retirement calculator, which add contributions, raises and retirement goals on top of the same compounding math.
Frequently asked questions
How do you calculate compound interest?
Use A = P × (1 + r/n)^(n×t). $5,000 at 6% compounded monthly for 10 years is 5,000 × (1 + 0.06/12)^120, or about $9,097. The interest earned is the result minus the original $5,000.
What is the difference between simple and compound interest?
Simple interest is paid only on the original amount; compound interest is paid on the original amount plus interest already earned. $10,000 at 5% for 20 years earns $10,000 of simple interest but about $16,500 with annual compounding.
How long does it take to double my money?
Divide 72 by the annual return. At 8% your money doubles in about 9 years; at 4%, about 18 years. This Rule of 72 is an approximation that works well for rates between about 4% and 12%.
Does daily compounding make a big difference?
Not much compared with monthly compounding. At 5%, daily compounding yields about 5.127% a year and monthly about 5.116%. The bigger jump is from annual to monthly compounding.
What rate of return should I use for investments?
US stocks have averaged roughly 10% a year before inflation and about 7% after over long periods, but returns vary widely year to year, so many planners use 5% to 7% for projections. Savings accounts and CDs pay their stated APY.
Grow what this calculator projects.
TruthSayer AI sends quantitative stock signals across valuations, earnings and dark-pool activity, each one traded in its own funded account first.
Estimates for planning only, not financial, tax or legal advice. Tax tools use 2026 federal figures (brackets, $16,100 / $32,200 standard deduction, $19,000 gift exclusion, $15M lifetime exemption). Rates shown as defaults are examples; replace them with quotes you actually receive.