Compound Interest Calculator
Compounding is the engine behind long-term investing: returns earn returns, and the gap between what you contribute and what you end with widens every year. Enter a starting amount, a monthly contribution, an expected annual return, and a time horizon to see the projected balance and how much of it comes from growth rather than your own contributions.
Projected balance
$300,851
Total you put in
$130,000
Growth from returns
$170,851
Year-by-year breakdown
| Year | Contributed | Cumulative returns | Balance |
|---|---|---|---|
| 1 | $16,000 | $919 | $16,919 |
| 2 | $22,000 | $2,339 | $24,339 |
| 3 | $28,000 | $4,294 | $32,294 |
| 4 | $34,000 | $6,825 | $40,825 |
| 5 | $40,000 | $9,973 | $49,973 |
| 6 | $46,000 | $13,782 | $59,782 |
| 7 | $52,000 | $18,299 | $70,299 |
| 8 | $58,000 | $23,578 | $81,578 |
| 9 | $64,000 | $29,671 | $93,671 |
| 10 | $70,000 | $36,639 | $106,639 |
| 11 | $76,000 | $44,544 | $120,544 |
| 12 | $82,000 | $53,455 | $135,455 |
| 13 | $88,000 | $63,443 | $151,443 |
| 14 | $94,000 | $74,587 | $168,587 |
| 15 | $100,000 | $86,971 | $186,971 |
| 16 | $106,000 | $100,683 | $206,683 |
| 17 | $112,000 | $115,820 | $227,820 |
| 18 | $118,000 | $132,486 | $250,486 |
| 19 | $124,000 | $150,790 | $274,790 |
| 20 | $130,000 | $170,851 | $300,851 |
Assumes monthly compounding and contributions made at the end of each month. Figures are nominal and ignore taxes, fees, and inflation.
How compound interest works
Each period, your balance earns a return, and that return is added to the balance so the next period earns on a larger base. With monthly compounding the balance at the end of month m is the previous balance times (1 + r), where r is the annual return divided by 12, plus any new contribution. Over decades the contributions stay linear while the balance curves upward — that curve is the compounding effect, and it is why time in the market usually matters more than the size of any single contribution.
How to use this calculator
Set the initial investment to what you already hold, the monthly contribution to what you can add consistently, and the annual return to a rate you can justify — a broad equity index has historically returned in the high single digits before inflation, but past returns are not a promise. Use the year-by-year breakdown to see when returns begin to outweigh contributions, and switch the currency to match how you actually think about the number.
What it does not account for
This is a planning estimate, not financial advice and not a forecast of any specific security. It assumes a constant return, which real markets never deliver; actual paths are volatile and can be negative for long stretches. It also ignores taxes, trading fees, fund expense ratios, and inflation — all of which reduce the real, after-cost value of the final balance. Treat the output as a directional illustration of the compounding mechanism, not a guaranteed outcome.
FAQ
Is a higher monthly contribution or a higher return more important?
Early on, contributions dominate the balance. Over long horizons the assumed return dominates, because returns compound on a growing base while contributions stay linear. The year-by-year breakdown shows the crossover point for your inputs.
What annual return should I enter?
Use a rate you can defend rather than a hopeful one. Broad equity indices have historically returned in the high single digits before inflation and fees, but any single decade can be much higher or lower. Lower the rate to see a more conservative scenario.
Does this calculator give financial advice?
No. It illustrates the mathematics of compounding under a constant-return assumption. It does not account for volatility, taxes, fees, or inflation, and it is not a recommendation to buy or sell any security.