How this calculator works
Future value = lump sum × (1+i)^months + monthly contribution × ((1+i)^months − 1)/i, where i = rate/12. Contributions are assumed at month-end (ordinary annuity).
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Compound Interest Calculator — See Your Money Grow
Compound interest is your money making money, and then that money making more money. Add an initial lump sum, monthly contributions, a rate and a timeframe.
Scenario examples (2026 rates)
| Initial investment ($) | Future value | Interest earned |
|---|---|---|
| 5,000 | $650,567.99 | $465,567.99 |
| 7,500 | $670,859.23 | $483,359.23 |
| 10,000 | $691,150.47 | $501,150.47 |
| 15,000 | $731,732.96 | $536,732.96 |
| 20,000 | $772,315.45 | $572,315.45 |
Every number above is computed by the same in-browser engine as the calculator — nothing is hardcoded.
The two engines of future value
The formula this calculator runs has two independent parts. The lump sum grows as initial amount times (1+i)^months, where i is the annual rate divided by 12; that is pure compounding, your money making money on itself. The monthly contribution grows as an ordinary annuity: contribution times ((1+i)^months − 1)/i, because each deposit compounds for a different number of months, the first for the whole term, the last for none. Which engine dominates flips over time. In the default scenario, $10,000 plus $500 monthly at 7 percent for 30 years, the ending balance is about $691,000, and contributions supplied $190,000 of it while growth supplied the remaining half million, roughly 73 percent. Early in the term the reverse holds: contributions dwarf growth, which is why young investors who check the balance after three years see little magic. The crossover, where compounded growth starts out-earning your deposits, typically arrives in the second decade, and after that the balance rises faster with each passing year even if you never increase the monthly amount.
Time beats size, and the math proves it
Compare two investors at 7 percent. Investor A deposits $500 per month for 20 years and then stops; that run ends near $260,000 in contributions grown. Investor B waits a decade, then deposits $500 per month for 20 years, years 11 through 30, finishing with the same $260,000 at year 30 but only if measured then, while A, having let the same $260,000 sit untouched for ten more years, reaches roughly $513,000 by year 30 without adding another dollar. The ten-year head start more than doubled the outcome. The mechanism is the exponent: every year of term multiplies the whole balance by 1.07, and dollars deposited early get multiplied more times. This is also why the rule of 72 works the way it does, 72 divided by the annual rate gives the doubling time, about 10.2 years at 7 percent, and each doubling doubles everything already in the account. For anyone under 40, the highest-return action available is not a better fund pick; it is starting this month and never interrupting the term.
Choosing a defensible return assumption
The rate field drives everything, so pick it like an analyst, not an optimist. Long-run US data: the S&P 500 has returned about 10 percent annually before inflation since 1926, and roughly 7 percent after; total bond markets have averaged about 4 to 5 percent nominal. A blended portfolio of 80 percent stocks and 20 percent bonds justifies an input near 8 percent nominal, a 60/40 mix about 7 percent, and a conservative retirement-shifted allocation 5 to 6 percent. Three discipline rules keep the projection honest. Use nominal rates with nominal targets, or real rates with today-dollar targets, never mix. Assume sequence-of-returns risk by sanity-checking the plan at a rate two points lower; if the story collapses at 5 percent, the plan needs more savings or a longer term. Ignore recent hot streaks; entering 12 percent because the last three years ran hot is how projections become fiction. The calculator shows what any assumption implies, but only you can keep the assumption defensible.
FAQ
What return should I assume?
Historically the S&P 500 averaged ~10%/yr before inflation, ~7% after. Bonds average ~4–5%. Use 7% for a conservative stock-portfolio projection.
How often should interest compound?
This calculator compounds monthly, which matches most investment accounts. Daily compounding gives a hair more; annual gives slightly less.
What's the rule of 72?
Divide 72 by your annual return for the years it takes to double: at 7% your money doubles roughly every 10 years. The calculator gives the exact figure.
What is the difference between APR and APY here?
This calculator compounds monthly, so an entered 7 percent annual rate grows to an effective annual yield of about 7.23 percent. Daily compounding at 7 percent yields roughly 7.25 percent, barely more, while annual compounding gives exactly 7 percent. Savings accounts advertise APY, which already includes the effect of compounding, whereas loans and investment projections usually quote nominal rates like the one you enter here. Over long horizons the convention barely matters compared to the rate assumption itself: the difference between monthly and daily compounding on 30 years is a fraction of a percent of the final total, while being wrong by one point on the annual rate changes the outcome by roughly 20 percent. Use APY directly if that is the only figure you have; the error is small.
Should I project with nominal or inflation-adjusted returns?
Both, for different questions. Nominal returns, 7 percent or so for a stock portfolio, answer how many dollars you will have; inflation-adjusted returns, roughly 4 to 5 percent after 2.5 to 3 percent inflation, answer what those dollars will buy. A $691,000 balance after 30 years at 7 percent nominal sounds like wealth, but at 3 percent inflation its purchasing power equals about $284,000 of today. For retirement and FIRE targets expressed in today dollars, such as needing $60,000 per year to live on, run the projection at a real rate of 4 to 4.5 percent instead, or compute nominally and deflate the result afterward. Mixing the two, projecting at 7 percent but comparing against a today-dollars target, overstates readiness by tens of percent over three decades and is the most common planning error this calculator sees.
How do fees change the projection?
Fees compound exactly like returns, but against you. On $10,000 growing 30 years with $500 monthly contributions, a 1 percent annual expense ratio difference costs on the order of $80,000 to $90,000 of ending balance, because the lost growth itself never compounds. That is why index funds charging 0.03 to 0.10 percent dominate actively managed funds charging 0.75 to 1.5 percent for most investors: studies of fund survival consistently find the large majority of active funds underperform their index over 15 years, after fees. When projecting, subtract known fees from the return you enter rather than assuming the headline rate. A portfolio earning 7 percent gross with 0.5 percent of fees should be modeled at 6.5 percent. The habit costs nothing here and keeps long-range numbers honest.