Calculator
Compound interest calculator
Compound interest is often called the eighth wonder of the world — small consistent contributions grow into serious wealth over decades. Enter your starting balance, monthly contribution, expected return, and horizon.
Updated July 2026
$
$
%
Future value
$691,150
Total contributed
$190,000
Growth from compounding
$501,150
264% more than contributions
How it works
Future Value = P × (1 + r/n)^(n×t) + PMT × [((1 + r/n)^(n×t) − 1) / (r/n)]
- P is your starting balance (principal).
- PMT is your monthly contribution.
- r is the annual return, expressed as a decimal (7% = 0.07).
- n is the number of compounding periods per year (we use 12 for monthly).
- t is the number of years.
- The first term compounds the starting balance; the second compounds the monthly contributions.
Worked examples
- $200/month at 7% for 40 years grows to about $524,000 — from just $96,000 in contributions.
- Starting 10 years earlier at the same rate almost doubles the final balance.
- Doubling the rate from 5% to 10% roughly triples the 30-year outcome — but expected market returns aren't a lever you control.
Frequently asked questions
What is a realistic return to use?
Long-term US stock market returns have averaged about 10% before inflation, roughly 7% after. Diversified portfolios blend stocks and bonds and tend to produce lower expected returns with lower volatility.
What is the Rule of 72?
A quick shortcut: divide 72 by the annual return to estimate how many years it takes for money to double. At 8%, roughly 9 years.
Does compounding work in a savings account?
Yes — APY compounding is the same math applied to a lower rate. A high-yield savings account at 5% APY roughly doubles cash in about 14 years, ignoring inflation.
Related
Educational information only. Not personalised financial advice. Consult a qualified professional for decisions specific to your situation.