Finance & Tax

Compound Interest Calculator

See exactly how a lump sum plus regular contributions grows over time. Choose any compounding frequency, add an inflation adjustment and watch the interest curve overtake your own deposits.

Your savings plan

Initial deposit$10,000.00

Monthly contribution$500.00

$500.00 added each period

Annual interest rate7.0%

Effective annual yield 7.23%

Time horizon20 years

Compounding frequency

Future value: $300,850.72
Total contributed: $130,000.00
Compound interest earned: $170,850.72
Real value today: $166,573.75

What makes up your balance

Your own money versus the interest the market adds on top.

$300,850.72future value

Initial deposit
Contributions
Compound interest

What makes up your balance
Category	Value
Initial deposit	$10,000.00
Contributions	$120,000.00
Compound interest	$170,850.72

Interest share of the final balance

The larger this slice, the harder compounding is working for you.

56.79%from interest

Your contributions
Compound interest

Interest share of the final balance
Category	Value
Your contributions	$130,000.00
Compound interest	$170,850.72

How your balance compounds over time

Principal stays flat while contributions and interest stack on top — the curve steepens as compounding accelerates.

Initial deposit
Cumulative contributions
Cumulative interest

How your balance compounds over time
Category	Value
1	Initial deposit: $10,000.00 · Cumulative contributions: $6,000.00 · Cumulative interest: $919.19
2	Initial deposit: $10,000.00 · Cumulative contributions: $12,000.00 · Cumulative interest: $2,338.58
3	Initial deposit: $10,000.00 · Cumulative contributions: $18,000.00 · Cumulative interest: $4,294.31
4	Initial deposit: $10,000.00 · Cumulative contributions: $24,000.00 · Cumulative interest: $6,825.16
5	Initial deposit: $10,000.00 · Cumulative contributions: $30,000.00 · Cumulative interest: $9,972.70
6	Initial deposit: $10,000.00 · Cumulative contributions: $36,000.00 · Cumulative interest: $13,781.53
7	Initial deposit: $10,000.00 · Cumulative contributions: $42,000.00 · Cumulative interest: $18,299.43
8	Initial deposit: $10,000.00 · Cumulative contributions: $48,000.00 · Cumulative interest: $23,577.68
9	Initial deposit: $10,000.00 · Cumulative contributions: $54,000.00 · Cumulative interest: $29,671.22
10	Initial deposit: $10,000.00 · Cumulative contributions: $60,000.00 · Cumulative interest: $36,639.02
11	Initial deposit: $10,000.00 · Cumulative contributions: $66,000.00 · Cumulative interest: $44,544.25
12	Initial deposit: $10,000.00 · Cumulative contributions: $72,000.00 · Cumulative interest: $53,454.70
13	Initial deposit: $10,000.00 · Cumulative contributions: $78,000.00 · Cumulative interest: $63,443.02
14	Initial deposit: $10,000.00 · Cumulative contributions: $84,000.00 · Cumulative interest: $74,587.14
15	Initial deposit: $10,000.00 · Cumulative contributions: $90,000.00 · Cumulative interest: $86,970.62
16	Initial deposit: $10,000.00 · Cumulative contributions: $96,000.00 · Cumulative interest: $100,683.03
17	Initial deposit: $10,000.00 · Cumulative contributions: $102,000.00 · Cumulative interest: $115,820.45
18	Initial deposit: $10,000.00 · Cumulative contributions: $108,000.00 · Cumulative interest: $132,485.91
19	Initial deposit: $10,000.00 · Cumulative contributions: $114,000.00 · Cumulative interest: $150,789.85
20	Initial deposit: $10,000.00 · Cumulative contributions: $120,000.00 · Cumulative interest: $170,850.72

Nominal vs real (inflation-adjusted) balance

The gap between the two lines is the purchasing power inflation quietly takes away.

Nominal balance
Real balance

Nominal vs real (inflation-adjusted) balance
Category	Value
1	Nominal balance: $16,919.19 · Real balance: $16,426.40
2	Nominal balance: $24,338.58 · Real balance: $22,941.44
3	Nominal balance: $32,294.31 · Real balance: $29,553.86
4	Nominal balance: $40,825.16 · Real balance: $36,272.62
5	Nominal balance: $49,972.70 · Real balance: $43,106.89
6	Nominal balance: $59,781.53 · Real balance: $50,066.09
7	Nominal balance: $70,299.43 · Real balance: $57,159.87
8	Nominal balance: $81,577.68 · Real balance: $64,398.17
9	Nominal balance: $93,671.22 · Real balance: $71,791.19
10	Nominal balance: $106,639.02 · Real balance: $79,349.44
11	Nominal balance: $120,544.25 · Real balance: $87,083.73
12	Nominal balance: $135,454.70 · Real balance: $95,005.20
13	Nominal balance: $151,443.02 · Real balance: $103,125.33
14	Nominal balance: $168,587.14 · Real balance: $111,455.96
15	Nominal balance: $186,970.62 · Real balance: $120,009.32
16	Nominal balance: $206,683.03 · Real balance: $128,798.03
17	Nominal balance: $227,820.45 · Real balance: $137,835.12
18	Nominal balance: $250,485.91 · Real balance: $147,134.07
19	Nominal balance: $274,789.85 · Real balance: $156,708.81
20	Nominal balance: $300,850.72 · Real balance: $166,573.75

Interest earned in each year

Yearly interest keeps climbing because it is calculated on an ever-larger balance.

Interest earned in each year
Category	Value
1	$919.19
2	$1,419.38
3	$1,955.73
4	$2,530.85
5	$3,147.55
6	$3,808.82
7	$4,517.90
8	$5,278.24
9	$6,093.55
10	$6,967.79
11	$7,905.24
12	$8,910.45
13	$9,988.32
14	$11,144.12
15	$12,383.47
16	$13,712.41
17	$15,137.43
18	$16,665.45
19	$18,303.94
20	$20,060.87

The rule of 72 says your money doubles in about 10.3 years

At 7.00% a year, dividing 72 by the rate gives a quick doubling estimate. Your effective annual yield of 7.23% is higher than the nominal rate because interest is compounded every month.

Projections assume a constant rate and no tax, fees or withdrawals. Real investments fluctuate, and returns are not guaranteed. The inflation adjustment uses a constant rate rather than the actual CPI path. Figures are for planning only, not financial advice.

The compound interest formula, explained

Compound interest is the mechanism that turns modest, consistent saving into meaningful wealth. The mathematics is published by the U.S. Securities and Exchange Commission on Investor.gov and is the same formula used by every bank and brokerage projection tool.

Lump sum only

A = P × (1 + r/n)^(n × t)

A = future value
P = principal (initial deposit)
r = nominal annual interest rate, as a decimal
n = compounding periods per year
t = time in years

With regular contributions

A = P(1 + r/n)^(nt) + PMT × [ ((1 + r/n)^(nt) − 1) ÷ (r/n) ]

PMT = contribution added each compounding period

The second term is an annuity factor: it sums every contribution forward to the end of the horizon, each one compounding for however long it has been invested. This calculator converts your chosen cadence (monthly or annual) into a per-compounding-period figure before applying the formula, so a monthly deposit into a daily compounding account is handled correctly.

Effective annual yield (APY)

APY = (1 + r/n)^n − 1

Required by the Truth in Savings Act (12 CFR 1030.2), APY lets you compare accounts with different compounding schedules. A 7% nominal rate compounded monthly is a 7.23% APY; compounded daily it is 7.25%. The gap widens as the nominal rate rises.

Inflation adjustment

Real value = Nominal value ÷ (1 + i)^t

i = assumed annual inflation rate

A dollar in twenty years will not buy what a dollar buys today. The real-value line deflates the projection by your inflation assumption so you can see the purchasing power you will actually command. The long-run US CPI average is roughly 3% a year, which is the default here.

Worked examples

United States — $10,000 plus $500 a month at 7% for 20 years

Compounded monthly, this grows to $300,850.72 from $130,000 of contributions. Compound interest alone accounts for $170,850.72 — more than your own money. Adjusted for 3% inflation the real value is $166,573.75, so inflation erodes $134,276.97 of the headline figure.

United Kingdom — £10,000 plus £200 a month at 5% for 25 years

Compounded monthly, the pot reaches £153,914.85 from £70,000 of contributions, with £83,914.85 of compound interest. At 2.5% inflation the real value is £83,020.22. A UK cash ISA compounds tax-free, which is why the effective yield matters as much as the headline rate.

European Union — €5,000 plus €300 a month at 4% for 15 years

Compounded monthly, the balance reaches €82,928.65 from €59,000 of contributions, earning €23,928.65 of interest. At 2% inflation the real value is €61,617.21. Under the EU's MiFID II disclosure rules, providers must show you both the nominal and the inflation-adjusted projection.

How to use this calculator

Enter your initial deposit — the lump sum you are starting with today.
Set your contribution and choose whether it lands monthly or annually under the advanced options.
Enter the annual interest rate you expect. Use a realistic long-run figure rather than a single good year.
Pick your time horizon and compounding frequency — daily, monthly, quarterly, semi-annual or annual.
Leave the inflation adjustment on to see what the balance is really worth in today's money.
Use Share to copy a link to your scenario, or Download CSV to export the year-by-year projection.

FAQ

Frequently asked questions

Still unsure about something? Our contact page reaches a real person, usually within two business days.

What is compound interest and how does it work?

Compound interest is interest calculated on both your original deposit and the interest that deposit has already earned. Each compounding period the interest is added to the balance, so the next period earns interest on a larger amount. Over long horizons this snowball effect dominates: in the default scenario on this page, $130,000 of your own money grows to $300,850.72, of which $170,850.72 is pure compound interest.

What is the compound interest formula?

For a lump sum the formula is A = P(1 + r/n)^(nt), where P is the principal, r the nominal annual rate as a decimal, n the number of compounding periods per year and t the number of years. When you also make regular contributions the full formula is A = P(1 + r/n)^(nt) + PMT × [((1 + r/n)^(nt) − 1) ÷ (r/n)]. This is the formula published by the SEC on Investor.gov and the one this calculator implements exactly.

How often should interest compound?

More frequent compounding produces a slightly higher effective yield. At a 7% nominal rate, annual compounding yields exactly 7.00%, monthly compounding yields 7.23%, and daily compounding yields 7.25%. The difference is small at ordinary rates but grows with the rate and the horizon. The Truth in Savings Act (12 CFR 1030.2) requires banks to disclose the annual percentage yield (APY) precisely so you can compare accounts with different compounding schedules on a like-for-like basis.

Why does the calculator show an inflation-adjusted value?

A future balance tells you how many dollars you will have, not what those dollars will buy. The real value divides the nominal balance by (1 + inflation)^t. In the default scenario, $300,850.72 after 20 years is worth only $166,573.75 in today's purchasing power at 3% inflation — a loss of $134,276.97. Planning in real terms prevents you from overestimating how far your savings will stretch.

Is it better to contribute monthly or once a year?

Monthly contributions almost always win because each deposit starts earning sooner. Contributing $6,000 once a year at 7% for 20 years produces $284,669.80, while contributing $500 a month produces $300,850.72 — about $16,181 more from the same total money. The earlier a dollar is invested, the longer it compounds, which is why automated monthly transfers are the standard recommendation.

What is the rule of 72?

The rule of 72 is a mental shortcut for doubling time: divide 72 by the annual rate. At 7% your money doubles in roughly 72 ÷ 7 ≈ 10.3 years. The rule is accurate to within a few percent for rates between about 4% and 15%. It uses the nominal rate, so if compounding is frequent the true doubling time is marginally shorter than the estimate.