Want the full breakdown? Read Compound Interest: Complete Guide
Calculator#
Compound Interest Calculator
See how your money grows over time with compound interest
Your Investment Growth
Final Balance
$0
Total Contributions
$0
Interest Earned
$0
Contributions
Interest Earned
50%
50%
Growth Over Time
Input Fields#
| Field | What to Enter | Typical Values |
|---|---|---|
| Initial Investment | Starting lump sum | $0 - $50,000 |
| Monthly Contribution | Regular monthly amount | $100 - $2,000 |
| Time Period | Years to grow | 10 - 40 years |
| Annual Return | Expected yearly return | 5% - 10% |
| Compounding Frequency | How often interest compounds | Monthly (most common) |
Tip
Use 7% for inflation-adjusted S&P 500 returns. Use 10% for nominal (before inflation).
Example#
| Input | Value |
|---|---|
| Initial | $5,000 |
| Monthly | $500 |
| Years | 25 |
| Return | 7% |
| Frequency | Monthly |
Result: $436,311 final balance - $155,000 contributed, $281,311 earned from compounding.
Quick Tips#
- Be conservative - Markets don't return 7% every year
- Account for inflation - $436K in 25 years buys less than $436K today
- Factor in fees - 1% annual fees cost tens of thousands over decades
- Start now - Time matters more than timing
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Learn the math: Compound Interest: Complete Guide
Frequently Asked Questions
How is compound interest calculated?
Compound interest grows your money on both your contributions and the returns those contributions already earned. This calculator compounds monthly and factors in your starting amount, monthly contributions, time horizon, and expected annual return.
What return rate should I use?
Use 7% for an inflation-adjusted long-term S&P 500 estimate, or 10% for the nominal figure before inflation. Markets do not return this every year, so lean conservative when planning.
How much of the final balance is growth versus contributions?
On a realistic run (5,000 start, 500 per month for 25 years at 7%) the balance reaches about 436,000, of which roughly 155,000 is what you paid in and 281,000 is compounding. The longer the horizon, the bigger the compounding share.
Does monthly compounding make a big difference?
It helps a little versus annual, but the two largest levers by far are your contribution amount and your time horizon. Starting earlier beats trying to time the market.
Is the result adjusted for inflation?
No, it shows nominal figures. A balance decades out buys less than the same number today, so treat it as a target, or use a real (inflation-adjusted) return if you want the figure in today's money.
Disclaimer: This calculator reflects my personal views and is for educational purposes only. It is not financial advice. Every situation is different. Always check your country's specific tax and investment rules before acting. See the full Disclaimer and Privacy Policy for the long version.
