Compound interest calculator
Watch a starting balance and regular deposits grow over time.
Interest is compounded monthly. Deposits are added at the end of each month.
Future balance
How compound interest works
Compound interest is interest earned on both your original money and the interest it has already earned. That snowball effect is why savings and investments grow faster the longer you leave them alone, and why starting early matters more than almost anything else.
The formula
P is the starting amount, PMT is the regular deposit, r is the rate per period (here, monthly), and n is the number of periods. This tool compounds monthly.
Worked example
Start with $1,000, add $200 a month, and earn 7% a year for 20 years. You would finish with about $108,000. Of that, only $49,000 is money you put in; the other ~$59,000 is compound growth.
Frequently asked questions
What is compound interest?
It is interest calculated on your principal plus all the interest already added. Because each period earns interest on a bigger balance, your money grows at an accelerating rate.
How is compound interest calculated?
The future value formula applies the periodic rate to a growing balance over many periods, then adds the growth from any regular deposits. This calculator does it for you when you enter a starting amount, a monthly deposit, a rate, and a number of years.
What is the difference between simple and compound interest?
Simple interest is paid only on the original principal. Compound interest is paid on the principal plus accumulated interest, so over time it produces much larger returns.
Why does starting early matter so much?
Time is the most powerful ingredient in compounding. Money invested in your twenties has decades to grow, so even small early contributions can outgrow much larger contributions made later.
How often is interest compounded?
It depends on the account. Common options are daily, monthly, quarterly, or yearly. More frequent compounding grows slightly faster. This calculator compounds monthly.