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How to use the compound interest calculator
This compound interest calculator shows what a savings account, index fund or retirement pot could be worth after years of regular deposits. The page opens with a typical plan already filled in: $10,000 to start, $500 a month, 7% a year for 20 years. That ends at about $300,851, and $170,851 of it is interest.
- Enter the starting amount and what you plan to add, then pick monthly, quarterly or yearly deposits.
- Choose whether deposits land at the start or end of each period. Most paycheck-funded plans are end of month.
- Set the annual rate and how often interest compounds. Savings accounts usually compound daily or monthly.
- Add a yearly raise to your contribution if you expect to save more as you earn more, and an inflation rate to see the result in today's money.
- Read the chart and table, then save the result as a PDF or download the yearly table as CSV for a spreadsheet.
How much will my savings grow with monthly contributions?
The answer depends mostly on two things: the rate and how long you leave the money alone. Here is what $500 a month becomes at 7% compounded monthly, with nothing to start:
| Years | You put in | Interest earned | Balance |
|---|---|---|---|
| 5 | $30,000 | $5,796 | $35,796 |
| 10 | $60,000 | $26,542 | $86,542 |
| 20 | $120,000 | $140,463 | $260,463 |
| 30 | $180,000 | $429,986 | $609,986 |
Look at the jump between 20 and 30 years. You add $60,000 more of your own money, but the balance grows by almost $350,000. That is compounding: in the later years, the interest on past interest is bigger than your deposits.
The same effect is why starting early beats saving more later. Someone who puts in $300 a month from age 25 to 65 at 7% ends with about $787,444. Starting at 35 with the same $300 gives about $365,991. Ten years of delay costs more than half the result, even though the late starter only deposited $36,000 less.
The compound interest formula
For a single deposit with no additions, the textbook formula is:
P = starting amount, r = annual rate ÷ 100
n = compounding periods per year, t = years
Example: $1,000 at 5% compounded yearly for 10 years is 1,000 × 1.05^10 = $1,628.89. Regular deposits are harder to do by hand, especially when deposits are monthly but compounding is daily or yearly. The calculator handles that by working month by month. Each month the balance grows by the monthly equivalent of your rate, (1 + r/n)^(n/12), and the deposit is added at the start or end of the period you picked.
One honest caveat. Some banks pay simple interest on money deposited during a year and only compound at year end. If you choose yearly compounding with monthly deposits, this calculator uses the equivalent monthly rate instead, so its result can be a few dollars higher than a bank that works the other way.
Does compounding frequency matter?
Less than most people expect. Here is $10,000 at 5% for 10 years:
| Compounding | Balance after 10 years | APY |
|---|---|---|
| Yearly | $16,288.95 | 5.000% |
| Twice a year | $16,386.16 | 5.063% |
| Quarterly | $16,436.19 | 5.095% |
| Monthly | $16,470.09 | 5.116% |
| Daily | $16,486.65 | 5.127% |
Going from monthly to daily is worth $17 over a decade. When you compare two savings accounts, compare the APY (shown in the results) rather than the compounding schedule. A 5.1% account compounded yearly beats a 5% account compounded daily.
How much do I need to save each month to reach a goal?
Switch to "Monthly amount for a goal" and enter the target. The calculator works backwards and shows the deposit you need. To reach $1,000,000 in 30 years at 7% with nothing saved yet, you need about $820 a month. Depositing at the start of each month lowers that to about $815.
If you set a yearly raise, the figure shown is the first year's deposit; it then grows by that percentage every year. That is often more realistic than one flat amount for 30 years, since pay usually rises over a career.
Why the real value matters
A big number 30 years from now is not worth the same as that number today. With inflation at 3% a year, $100,000 in 20 years buys roughly what $55,368 buys now. The default example's $300,851 is worth about $166,574 in today's money. Planning with the real value keeps a retirement target honest.
What this calculator leaves out
- Returns are not steady. A stock fund that averages 7% might lose 20% one year and gain 25% the next. Try a lower rate as a cautious case.
- Fees. A 1% yearly fund fee comes straight off the rate. Enter 6% instead of 7% to see what it costs over decades.
- Tax. Interest in a normal savings account is usually taxable; tax-advantaged accounts follow their own rules. Nothing here accounts for tax.
The calculation runs in your browser and nothing you type is sent anywhere.
Frequently asked questions
How do I calculate compound interest with monthly contributions?
Grow the balance by one month of interest, add the deposit, and repeat for every month. $10,000 plus $500 a month at 7% compounded monthly grows to about $300,851 after 20 years, of which $130,000 is your own money.
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 compounding periods per year and t the years. $10,000 at 5% compounded yearly for 10 years gives 10,000 × 1.05^10 = $16,288.95.
Is daily compounding much better than monthly?
Barely. $10,000 at 5% for 10 years ends at $16,486.65 with daily compounding and $16,470.09 with monthly, a difference of about $17. The rate itself matters far more than the compounding frequency.
How much do I need to save per month to reach $1 million?
About $820 a month for 30 years at a steady 7% return, starting from zero. Switch the calculator to 'Monthly amount for a goal' and enter your own target, rate and time frame.
Does it matter if I deposit at the start or end of the month?
A little. Money added at the start earns one extra period of interest. With the default example ($10,000, $500 a month, 7%, 20 years) start-of-month deposits end about $1,519 higher.
What does real value or inflation-adjusted mean?
It is what the future balance would buy in today's prices. At 3% inflation, $100,000 in 20 years buys what about $55,368 buys now, so a balance that looks large can feel much smaller.
What is the difference between APR and APY?
APR is the stated yearly rate and APY includes the effect of compounding. A 7% rate compounded monthly is an APY of 7.229%, because each month's interest also earns interest.