Compound Interest Calculator
See how your money grows with the power of compounding — visualised with charts and AI explanations.
Finance tools · Free · AI-powered
About the Compound Interest Calculator
Compound interest is the most powerful force in personal finance. Unlike simple interest — where you only earn returns on your original deposit — compound interest pays you returns on your returns, creating exponential growth over time. The longer your money compounds, the more dramatic the effect.
Use this free compound interest calculator to project how an investment grows over months, years, or decades. Enter your starting balance, monthly contribution, expected annual rate of return, and time horizon. The chart breaks down what portion of your final balance comes from your contributions versus pure interest.
Why your time horizon matters more than your contribution amount. Most people focus on contributing more. The math says otherwise: starting earlier with smaller amounts almost always beats starting later with larger ones. Investing $200/month from age 25 to 35 (then stopping completely) ends up at age 65 with more money than investing $200/month from age 35 to 65. That's the magic of compounding.
What rate of return should you use? A 7% annual return is a common long-term planning assumption for a diversified stock portfolio — not a guarantee; use around 5% if you want the result in today's dollars. Savings accounts pay less, and their rates change with interest rates generally. Be realistic — overly optimistic rates produce dangerously inflated projections.
Why this calculator is better than your bank's: we show you the year-by-year breakdown, separate contributions from interest, and let our AI explain the result in plain English. Use the AI Insights button after running the numbers for personalised tips on accelerating growth. This is general education, not financial advice.
How to use it
- Enter your starting balance. Type the amount you have today as the initial deposit.
- Enter your monthly contribution. Type how much you plan to add each month — be realistic.
- Set the expected annual rate. Use a conservative number — e.g. 7% for a stock-heavy portfolio, less for savings.
- Choose your time horizon. Set how many years you'll let it compound.
- Review the result and chart. See your final balance and how much came from interest vs contributions.
- Get AI insights (optional). Click 'Explain with AI' for personalised tips.
Frequently asked questions
How often does this compound interest calculator compound, and when are monthly contributions added?
It compounds monthly, using your annual rate divided by 12, and adds each monthly contribution at the end of the month. Your initial deposit is counted in Total contributions, so Interest earned is everything above the money you put in.
What do the default inputs show in the compound interest calculator?
A $5,000 initial deposit plus $500 a month at 8% for 20 years grows to about $319,144. Of that, $125,000 is your own contributions and about $194,144 is interest — more than half the final balance.
Does the compound interest calculator account for inflation, taxes or fees?
No. It grows your money at exactly the rate you enter, with no taxes, fund fees or inflation taken out. To see results in today's dollars, enter a rate that is already net of expected inflation and fees; this is general education, not investment advice.
Why are the interest bars so small in the early years of the compound interest chart?
Each month's interest is earned on the balance at that point, and early on the balance is mostly your own deposits. As the balance grows, interest earns interest, so the interest portion of each stacked bar gets larger every year and eventually overtakes contributions on long horizons.
What is the longest time horizon the compound interest calculator supports?
The Years field is designed for 1 to 60 years and uses whole years only. If you type a larger number, the projection is capped at 100 years and a note tells you so.
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