Compound Interest Calculator

How compounding is calculated

Interest compounds monthly here, with any recurring contribution added at the end of each month before the next round of interest applies — which is how most real savings and retirement accounts actually work.

The year-by-year table breaks out your balance, total contributed, and total interest earned, so you can see how much of the final number is actually growth versus money you put in yourself — over a long enough horizon at a real interest rate, growth typically ends up outpacing contributions by a wide margin, which is the whole point of starting early.

The rule of 72, as a sanity check

A quick mental shortcut for roughly how long money takes to double: divide 72 by the annual interest rate. At 7%, that's about 10.3 years to double a lump sum with no further contributions — a useful gut-check number to compare against whatever this calculator's more precise, contribution-aware result shows for a given rate and timeframe.

Why starting earlier beats a higher rate

Because interest compounds on interest already earned, time in the market does more work than most people expect relative to the rate itself. $200 a month starting at age 25 and stopping entirely at 35 (ten years of contributions, then left alone) can end up worth more by retirement age than the same $200 a month started at 35 and continued every year until retirement — even though the second saver put in far more total money, the first saver's contributions had decades longer to compound. Try both scenarios through the calculator above with the same rate and different starting years to see the gap for yourself.

This shows nominal growth, not inflation-adjusted growth

The future value this calculator shows is in today's dollar terms only if inflation is zero, which it never actually is. A commonly used rough adjustment is to subtract an assumed average inflation rate (historically often estimated around 2-3% annually in stable economies) from the interest rate you enter, to get a rough sense of purchasing-power growth rather than sticker-price growth — the nominal number here will always look larger than what that money will actually buy years from now.