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FinanceInformational only

Compound Interest Calculator

See how money grows over time with compounding. Enter principal, rate, time, and optional monthly contributions to project future value.

Future value
$219,269
Total contributed
$70,000
Interest earned
$149,269

What this calculates

Compound interest is the engine of long-term wealth: you earn interest on your principal, then earn interest on that interest, and so on. This calculator projects how an initial deposit grows over years, with optional regular contributions. It's the single most important calculation for understanding retirement saving, investment returns, and the real cost of debt.

Formula & how it works

With a one-time deposit, future value FV = P × (1 + r/n)^(n×t), where P is principal, r is the annual rate (decimal), n is compounding periods per year, and t is years. With monthly contributions C, add the annuity term: FV_contributions = C × ((1 + r/12)^(12t) − 1) ÷ (r/12). The two terms sum to the total. More frequent compounding (daily vs. yearly) increases FV slightly, but the rate and the time you stay invested matter far more.

Worked example

Deposit $10,000 at 7 % per year, compounded monthly, for 25 years, with no extra contributions. FV = 10 000 × (1 + 0.07/12)^(12×25) = 10 000 × (1.00583)^300 ≈ $57,254. Now add $200/month contributions: the annuity term adds another ≈ $162,150, bringing the total to about $219,400. Same 7 % rate, same 25 years — the contributions more than tripled the result.

Frequently asked questions

Why does starting earlier matter so much?

Compounding is exponential, not linear. The last 10 years of a 30-year horizon do more work than the first 20 combined, because the balance is much larger by then. Starting 10 years earlier with the same monthly contribution typically more than doubles the final balance.

How realistic is a 7 % rate?

7 % is roughly the long-run real (inflation-adjusted) return of a broad US stock index, and ~10 % nominal. Past performance is no guarantee. Bonds and savings accounts return much less; speculative assets can return more or lose everything.

Does this account for inflation or taxes?

No — the result is a nominal figure. To estimate purchasing power, subtract expected inflation from the rate (e.g., use 4–5 % instead of 7 %). Taxes vary by account type (taxable, IRA, 401k) and country; use after-tax assumptions if comparing to today's dollars.

What's the rule of 72?

A handy shortcut: at rate r %, money roughly doubles every 72/r years. At 6 %, that's 12 years; at 9 %, 8 years. Not exact, but close enough for mental math.

Sources

Disclaimer: Informational only. Investment returns are not guaranteed.

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