Compound interest is interest earned on interest. Each period, the interest is added to the balance, and the next period's interest is calculated on that larger amount. Add regular monthly contributions and the effect builds year after year. This calculator shows the future value of a starting amount plus monthly deposits, how much of that is your own money, and how much is interest.
How to use the compound interest calculator
- Enter your starting amount — what's in the account today.
- Enter a monthly contribution, or 0 if you won't add more.
- Enter the annual interest rate or expected return.
- Enter the number of years.
- Choose how often interest compounds. Savings accounts typically compound daily or monthly; many bonds semiannually.
Compound interest formula
Monthly deposits: FV = PMT × ((1 + i)^m − 1) ÷ i, where i = (1 + r/n)^(n/12) − 1 and m = 12 × t
APY = (1 + r/n)^n − 1
- P — starting amount; PMT — monthly contribution
- r — annual rate as a decimal (5% = 0.05)
- n — compounding periods per year; t — years
- i — the equivalent monthly rate, so monthly deposits work with any compounding frequency
Worked example
$10,000 at 5% compounded monthly for 10 years, adding $100 a month.
- Starting amount grows to 10,000 × (1 + 0.05/12)^120 = $16,470.09
- Monthly deposits grow to 100 × 155.28 = $15,528.23
- Future value: $31,998.32
- Your contributions: 10,000 + 120 × 100 = $22,000, so interest earned is $9,998.32
Growth of $10,000 with monthly compounding
No additional contributions.
| Rate | 5 years | 10 years | 20 years | 30 years |
|---|---|---|---|---|
| 3% | $11,616.17 | $13,493.54 | $18,207.55 | $24,568.42 |
| 5% | $12,833.59 | $16,470.09 | $27,126.40 | $44,677.44 |
| 7% | $14,176.25 | $20,096.61 | $40,387.39 | $81,164.97 |
| 10% | $16,453.09 | $27,070.41 | $73,280.74 | $198,373.99 |
Notice how the later columns pull away: at 7%, the balance roughly doubles every 10 years. The “rule of 72” gives a quick estimate — divide 72 by the rate to get the approximate years to double (72 ÷ 7 ≈ 10.3).
Things to keep in mind
- Investment returns are not guaranteed. Stocks and funds rise and fall; a fixed rate is a simplification for planning.
- Fees reduce growth. A 1% annual fee compounds against you just like interest compounds for you.
- Time matters most. Starting earlier usually beats contributing more later.
Saving toward a specific goal? The Savings Calculator works out the monthly amount you need. This calculator is for education and planning, not financial advice.
Frequently asked questions
What is the compound interest formula?
A = P × (1 + r/n)^(n × t), where P is the starting amount, r the annual rate as a decimal, n the number of times interest compounds per year and t the number of years. $10,000 at 5% compounded monthly for 10 years grows to $16,470.09.
How much difference does compounding frequency make?
Less than most people expect. $10,000 at 5% for 10 years becomes $16,288.95 with annual compounding, $16,470.09 monthly and $16,486.65 daily. The rate and the number of years matter far more.
What is APY?
Annual percentage yield is the rate you actually earn in a year once compounding is included: (1 + r/n)^n − 1. A 5% rate compounded monthly is an APY of about 5.116%.
Are contributions made at the start or end of the month?
This calculator adds them at the end of each month, the usual assumption. Deposits at the start of the month earn one extra month of interest each, so the total would be a little higher.
Does this include taxes or inflation?
No. Interest in taxable accounts may be taxed each year, and inflation reduces what the future amount can buy. Use the Inflation Calculator to see how prices have changed over time.