Everyday ToolboxCompound Interest Calculator
Compound interest is interest earned on interest — the reason a modest monthly contribution can grow into a large sum over decades. Enter your starting balance, monthly contribution, expected return, and timeline to see exactly where you land.
Frequently Asked Questions
What is compound interest?
Compound interest is interest calculated on both your original balance and the interest you have already earned. Each period, your balance grows a little — and the next period's interest is calculated on that larger balance. Over time the growth snowballs: the interest you earn in year 30 is far larger than in year 1.
How is compound interest calculated?
The standard formula for a lump sum is A = P(1 + r/n)^(nt), where P is the starting balance, r is the annual rate, n is how many times per year interest compounds, and t is years. Monthly contributions add a second term: each contribution compounds from the month it is made. This calculator simulates month by month, so contributions and compounding interact exactly.
How much will $10,000 grow at 7% for 30 years?
With no further contributions, $10,000 at 7% compounded monthly grows to about $81,165 after 30 years. Add $200 per month and the same $10,000 starting balance reaches about $325,159 — the monthly contributions add up to $72,000 of deposits but contribute far more than that through compounding.
Monthly vs annual compounding — does it matter?
Yes, but not hugely. More frequent compounding means interest starts earning interest sooner. On $10,000 at 7% for 30 years, monthly compounding beats annual compounding by roughly $5,000. The far bigger levers are your contribution amount, your rate, and — above all — time.
What is the Rule of 72?
A quick mental shortcut: divide 72 by your annual return to estimate how many years it takes your money to double. At 7%, money doubles in about 10.3 years (72 ÷ 7). At 10%, about 7.2 years. It is an approximation, but a useful one for gut-checking results.
What return should I assume?
For long-run planning, 7% is the common assumption for a stock-heavy portfolio after inflation (about 10% nominal minus ~3% inflation). A savings account or bonds will be lower (2–5%). Be conservative — a plan that works at 5% is safer than one that only works at 10%.
Is this compound interest calculator free?
Yes — completely free, no signup. It runs 100% in your browser. Results are estimates based on a constant return; real markets fluctuate, and this is not financial advice.