Compound Interest Calculator

Watch it in action (19 seconds)

Deposit, monthly contribution, rate — and the growth chart the calculator draws from them.

How the compound interest calculator works

Frequently asked questions

How is compound interest calculated?

Each month, the calculator adds your monthly contribution to the balance, then applies one month's worth of interest equal to (annual rate ÷ 12) × current balance. The interest is added to the balance, so next month's interest is computed on a slightly larger amount — that's the "compound" part.

Is the annual rate APR or APY?

APR (nominal). With monthly compounding, your effective annual yield (APY) will be slightly higher. For example, 7% APR compounded monthly = 7.229% APY. The "effective annual return" stat in the result panel shows your money-weighted CAGR including contributions.

Why does it assume contributions at the start of each month?

This is the "annuity-due" convention — your deposit at the start of the month earns interest for that month. It produces slightly higher final values than the "ordinary annuity" convention (deposits at end of month). Most investment calculators use annuity-due since it matches how most people think about regular deposits.

What rate should I assume?

Historical S&P 500 total return is about 7% real (after inflation) or 10% nominal over long periods. Bond portfolios return 3–5% nominal. High-yield savings accounts pay 4–5% currently. Always use real (inflation-adjusted) rates if you want to know your future purchasing power.

Does this account for taxes or inflation?

No. The calculator shows nominal, pre-tax growth. For real (inflation-adjusted) purchasing power, subtract your expected inflation rate from the annual rate (e.g., 7% nominal − 3% inflation = 4% real). For after-tax growth, use a tax-adjusted rate.