Compound Interest Calculator

Compound interest is interest earned on both your initial principal and the accumulated interest from previous periods. This creates a snowball effect where your money grows faster over time. For example, $10,000 at 7% compounded monthly grows to $40,000+ after 20 years with $500 monthly contributions.

More frequent compounding (daily or monthly vs. annually) yields slightly higher returns. Most savings accounts compound daily or monthly. The difference between daily and monthly compounding is small — typically less than 0.1% in effective annual yield.

Use this calculator to experiment with different monthly contribution amounts. For a more precise answer, try our Savings Goal Calculator which calculates the exact monthly amount needed to reach a specific target.

This calculator provides estimates assuming a constant rate of return. Real investments fluctuate year to year. For long-term retirement planning, also try our Retirement Savings Calculator which accounts for your current age, retirement age, and lifestyle spending.

No — this calculator shows nominal (pre-tax, pre-inflation) returns. To factor in inflation, use our Inflation Calculator. To estimate after-tax returns, multiply your expected return by (1 — your tax rate), or use our US Tax Calculator.