Compound Interest Calculator
Project a balance forward from a starting amount, an interest rate and regular contributions, with a year-by-year breakdown.
Compound interest is interest earned on interest already earned. Over short periods the effect is minor; over decades it becomes the dominant part of the result, which is why the arithmetic is hard to estimate without a compound interest calculator to hand.
Formula: FV = P × (1 + r/n)^(nt), plus the accumulated contributions
Your figures
Nominal annual rate before compounding.
Added at the end of each period below.
Results
Future value
US$150,425.36
after 20.0 years
- Total you put in
- US$65,000.00
- Interest earned
- +US$85,425.36
- Starting amount
- US$5,000.00
- Total contributions
- US$60,000.00
- Interest as a share of the final balance
- 56.79%
- Effective annual rateThe nominal rate after the compounding frequency is applied.
- 7.229%
What this means
Putting in US$65,000.00 in total and leaving it to compound at 7.00% produces US$150,425.36 after 20.0 years. Interest accounts for 56.79% of the final balance. This is a projection at a fixed rate — real returns vary year to year, and this figure is in nominal terms before inflation.
- Contributions are treated as arriving at the end of each period. Paying at the start of the period produces a slightly higher balance.
- Excludes tax, platform fees and inflation.
Future value: US$150,425.36
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About the Compound Interest calculation
This savings growth calculator projects a balance forward from a starting amount, an interest rate and optional regular contributions, and shows how much of the final figure came from what you put in versus what the interest added.
Contributions can be made at a different frequency from compounding — monthly deposits into an account that compounds daily, for instance. Rather than assuming the two align, this compounding calculator converts the rate to the contribution period so the projection stays accurate.
Compound Interest formula
lump sum:
FV = P × (1 + r/n) ^ (n × t)
with regular contributions m times a year:
period rate = (1 + r/n) ^ (n/m) − 1
balance is accumulated period by period, each contribution
made at the end of its period
effective annual rate = (1 + r/n) ^ n − 1- P
- Principal — the starting amount.
- r
- Nominal annual interest rate as a decimal.
- n
- Compounding periods per year.
- t
- Number of years.
- m
- Contributions per year.
The lump-sum formula is the standard one. Dividing the annual rate by the compounding frequency gives the rate per period, and raising it to the total number of periods gives the growth multiple.
Contributions complicate matters when their frequency differs from compounding. Converting the rate to the contribution period — the second formula — keeps the arithmetic exact rather than approximating.
Contributions are treated as arriving at the end of each period, the ordinary annuity convention. Paying at the start of each period earns one extra period of interest on every contribution and produces a slightly higher balance.
Because the balance is accumulated period by period rather than through the closed-form annuity formula, a zero interest rate needs no special case: every period simply adds the contribution. A horizon that does not land on a whole contribution period — 2.5 years with annual contributions, say — runs the whole periods and then accrues the remaining fraction, so the projection matches the exact number of years you typed.
Compound Interest: a worked example
$5,000 to start, $250 contributed monthly, 7% nominal annual interest compounded monthly, over 20 years.
- Monthly rate7% ÷ 12 = 0.5833%
- Periods20 × 12 = 240
- Lump sum grows to5,000 × 1.005833 ^ 240 = $20,193.69
- Contributions grow to250 × [(1.005833 ^ 240 − 1) ÷ 0.005833] = $130,231.66
- Future value$150,425.36
- Total paid in5,000 + (250 × 240) = $65,000
- Interest earned$85,425.36
$65,000 paid in becomes $150,425. Interest accounts for around 57% of the final balance — the compounding contributes more than the deposits.
How to use the Compound Interest calculator
- Enter your starting amount. Zero is fine if you are starting from nothing and contributing regularly.
- Enter the nominal annual interest rate — the headline rate before compounding is applied.
- Set the period in years, and choose how often interest compounds.
- Add a regular contribution and its frequency. Used as a monthly contribution calculator, set the frequency to monthly and enter what you pay in each month; leave it at zero to model a lump sum alone.
- Compare 'total you put in' against 'interest earned' to see how the balance was built.
Limitations of the Compound Interest calculator
Every calculation makes assumptions. These are the ones that matter here.
- Assumes a constant rate for the whole period. Real returns vary, sometimes substantially, and investment returns are not interest.
- Excludes tax, platform charges and fund fees, all of which reduce the outcome.
- Figures are nominal. At 3% inflation, $150,000 in twenty years buys roughly what $83,000 buys today.
- Contributions are assumed constant. Increasing them with inflation would produce a higher balance.
Frequently asked questions about Compound Interest
What is the difference between nominal and effective annual rate?
The nominal rate is the headline figure before compounding. The effective rate is what you actually earn once compounding is applied. At 12% nominal compounded monthly, the effective rate is 12.68%.
Is this the same as a future value calculator?
It computes the same quantity. Future value is the balance once the starting amount and every contribution have compounded to the end of the period, and that is the headline figure here, shown beside the total paid in and the interest earned.
Does compounding frequency make much difference?
Less than most people expect. On $10,000 at 5% over ten years, annual compounding gives $16,289 and daily gives $16,487 — about $198 over a decade. The rate and the time period matter far more.
Are contributions added at the start or the end of each period?
At the end, which is the ordinary annuity convention and the more conservative assumption. Contributing at the start of each period would produce a slightly higher balance.
Does this account for inflation?
No. All figures are nominal. To see purchasing power, subtract your inflation assumption from the interest rate before entering it — a rough approximation that works reasonably at low rates.
Can I use this for a loan?
Not directly. Loans amortise, with each payment covering interest and reducing principal, which is a different calculation. A dedicated loan repayment calculator is planned.
Last reviewed . See our methodology and editorial policy.
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