Compound Interest Calculator

The starting balance grows by (1 + annual rate / frequency)^(frequency × years). Monthly deposits are made at the end of each month and grow at the equivalent monthly yield of that selected frequency. The rate is nominal, not an APY; enter 7 for 7%.

$10,000 initially plus $200 at the end of each month, at 7% nominal interest compounded monthly for 30 years, produces $325,159.17. You deposit $82,000; modeled growth is $243,159.17. With no interest the same deposits total $82,000.

Compare several rates and periods, not just the largest result. The contribution line includes the initial balance. To evaluate purchasing power, divide the final balance by (1 + inflation rate)^years; subtracting inflation from returns is only an approximation.

This is a constant-rate model, not a market forecast. Taxes, fees, withdrawals, changing returns and account-specific interest-crediting rules are excluded. Monthly deposit timing can differ from your bank. Returns are not guaranteed.

Compound interest means that growth becomes part of the balance used for later growth. The starting balance is money already in the account; the monthly contribution is new money you plan to add. Enter those separately so the result distinguishes deposits from modeled interest. A contribution of $200 means $200 every month throughout the selected period. It does not mean one annual deposit, and the form does not automatically increase contributions when your income rises.

The annual percentage entered here is a nominal rate, paired with the selected compounding frequency. That matters when a savings product advertises an APY, which already reflects compounding. Entering an APY as a nominal rate can overstate the result. For an investment account, the rate is only a scenario assumption, not a promised return. If you cannot explain where a chosen percentage came from, run a lower scenario as well instead of relying on the most attractive projection.

Start with $1,000, add $100 each month, and choose a five-year period with a zero interest rate. There are 60 monthly deposits, so you add $6,000 and finish with $7,000. That outcome comes entirely from saving; none of it is interest. It is a helpful reference when considering higher-rate scenarios because it shows how much progress your contributions make on their own, without requiring any assumption about markets or future account yields.

Next, keep the starting balance, contribution and time unchanged while selecting a positive rate. The difference from $7,000 is the model's growth contribution. If you change the monthly deposit at the same time, the difference mixes extra saving with extra growth. That may be useful for planning, but it answers a different question. Deposits are treated as arriving at the end of each month, so a bank or investment account with different deposit dates can produce a different balance.

A large future balance can look more impressive than the underlying calculation warrants. Check the total-contribution figure, which includes the initial balance as well as monthly deposits. Then look at modeled growth separately. The distinction helps you see whether the result mostly depends on money you intend to save or on a return assumption. If a plan only works at one optimistic rate, that dependency is worth understanding before committing to a savings schedule.

Future dollars also buy a different amount when prices change. The form does not calculate inflation-adjusted purchasing power for you. For a separate illustration, divide a projected balance by one plus your assumed annual inflation rate raised to the number of years. Keep that assumption clearly labeled; inflation is not constant in real life either. Subtracting an inflation percentage directly from the nominal rate is only an approximation and does not duplicate that purchasing-power calculation exactly.

It can illustrate a constant-rate path, but it cannot predict a sequence of market returns. Actual investments can lose value, and the timing of gains, losses and contributions affects outcomes. The tool does not choose investments, estimate taxes or deduct management fees. If you use a rate after fees, note that choice so you do not subtract the same cost again when reviewing the result. A clean numerical projection is not evidence that the assumed path will occur.

For a savings account, check the institution's actual compounding and crediting rules, promotional period and balance requirements. A rate that lasts three months should not automatically be projected over 20 years. Withdrawals and interrupted contributions are outside this model too. Keep a copy of the inputs beside any result you use for planning. That makes it easier to revise the estimate when the account rate, your contribution budget or the time available changes.