Compound interest calculator

Enter what you have now, what you'll add each month, the yearly rate and how long you'll save. The beads show how much of the balance is your money and how much is interest.

Compound interest calculator
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$

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years

Final balance

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You put in
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Interest earned
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Year by yearDepositsInterest earned
Show the year-by-year table
Year-by-year table
YearDepositsInterest earnedFinal balance

What compound interest is

With compound interest you earn interest on your deposits and also on the interest you have already earned. Each year the amount that earns interest gets bigger, so growth speeds up over time.

A = P(1 + r/n)nt

  • A = final amount
  • P = starting amount
  • r = yearly rate as a decimal
  • n = times interest compounds per year
  • t = years

This calculator also adds your monthly deposits and compounds them the same way, month by month.

Why time matters more than the rate

Example: $10,000 plus $500 a month at 7% for 20 years grows to about $300,850. You deposit $130,000 and the rest is interest. Leave it for 30 years and the balance reaches about $691,000, even though you deposit only $60,000 more.

Look at the bead chart. In the early years jade (your deposits) fills most of each row. In later years saffron (interest) takes over. That is the point where your money earns more than you put in.

The rule of 72

For a quick estimate, divide 72 by the yearly rate to get the number of years it takes money to double. At 6% money doubles in about 12 years. At 9% it takes about 8.

Common questions

Does compounding frequency make a big difference?

Less than most people expect. At 5%, monthly compounding gives an effective rate of about 5.12% a year, compared with 5% for yearly compounding. The rate and the time you stay invested matter far more.

Is the return guaranteed?

Only for fixed-rate savings such as deposit accounts or bonds held to maturity. Investment returns change from year to year, so treat any rate you enter for stocks or funds as an average, not a promise.

Does this include inflation or taxes?

No. To see growth in today's money, subtract expected inflation from your rate. For example, a 7% return with 3% inflation means entering 4%.

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