Compound Interest Calculator
Watch your money snowball. Enter a starting amount, a monthly contribution and a growth rate, and see the final balance, how much you actually put in, and how much compounding added for free.
How much will $10,000 grow to in 20 years at 7%?
Compound interest: Compound interest is interest earned on both the original money and on interest already earned, so growth accelerates the longer the money stays invested. Investing $10,000 plus $200 a month at 7% a year for 20 years grows to roughly $144,600. You contribute $58,000 of that yourself; compounding adds about $86,600 — and stretching the same habit to 30 years reaches near $325,000.
How to calculate compound interest
- Grow the starting amount with the factor (1 + r ÷ n) raised to n × years, where r is the annual rate and n the compoundings per year.
- Grow each monthly contribution for the number of periods remaining after it is made, and add those grown values together.
- Add the grown starting amount and the grown contributions for the final balance.
- Subtract everything you contributed to isolate the growth that compounding produced.
Source: Investor.gov (SEC) — Compound Interest Calculator
Growth by year
Past performance never guarantees future returns — treat long-run return assumptions as planning estimates, not promises.
How compound interest works
Simple interest pays only on your original deposit. Compound interest pays on your deposit plus all the interest it has already earned — so growth accelerates over time, slowly at first and then remarkably fast. This calculator compounds your starting balance at the frequency you choose and adds your contribution every month, building the year-by-year table below. The most important number on the page is the split between "total you contributed" and "total growth": in any long compounding story, the second number eventually dwarfs the first, and time in the market matters more than the amount you start with.
The compound interest formula
P = starting amount · r = annual rate · n = compoundings per year · t = years
Worked example
Start with $10,000, add $200 a month, grow at 7% a year compounded monthly for 20 years. You contribute $58,000 of your own money in total. The account ends at roughly $144,600 — meaning compounding contributed about $86,600, roughly one and a half dollars of growth for every dollar you put in. Extend it to 30 years in the calculator and the same habit ends near $325,000, with growth outpacing contributions more than two to one. Now cut the rate to 4% — a savings-account world — and the 20-year result falls to about $95,600. Rate matters, but starting ten years earlier matters more.
What compounding rewards — and punishes
- Time is the main ingredient. Doubling your horizon much more than doubles the growth, because the biggest compounding happens in the final years when the balance is largest. Starting at 25 instead of 35 is worth more than any stock tip.
- Consistency beats intensity. A modest automatic monthly contribution survives bad markets, busy years and forgetfulness; sporadic large deposits usually do not happen at all.
- Fees are negative compounding. A 1% annual fee sounds trivial but consumes roughly a quarter of a 30-year outcome. Keep investment costs low and let the full rate work for you.
- Inflation is the silent counterweight. Money growing at 4% while inflation runs at 3% is only really growing at about 1%. Judge results by what they will buy, not just the number on the screen.
- Debt compounds against you. The identical mathematics powers a credit card balance at 24% APR — which is why clearing expensive debt (see the payoff calculator) is always the first "investment".
Where compounding actually happens
Inside investment accounts (401(k)s, IRAs, index funds) returns compound as dividends and gains are reinvested; inside savings products — CDs and high-yield accounts — interest compounds at the stated frequency, as in our CD calculator. For retirement specifically, where employer matching adds free contributions on top, use the retirement savings calculator, which handles matches and longer horizons.
Frequently asked questions
How much will $10,000 grow in 20 years at 7%?
About $40,400 on its own — just over four times the starting amount. Add $200 a month over the same period and the total reaches roughly $144,600, of which only $58,000 came out of your pocket. Time and contributions together are what make compounding dramatic.
What is the Rule of 72?
A shortcut for doubling time: divide 72 by your annual return to get the approximate years for money to double. At 7%, money doubles about every 10.3 years; at 4%, every 18 years; at 10%, every 7.2 years. It works for debt too — a balance at 24% APR doubles in about 3 years if left unpaid.
Does compounding frequency make a big difference?
Only a small one. On $10,000 at 7% over 20 years, annual compounding gives about $38,700 and daily compounding about $40,550 — a few percent difference, not a transformation. The rate, the contributions and above all the number of years matter far more. Choose monthly here to match how most accounts actually credit interest.
What return should I assume for investments?
For long-range planning, many advisors model diversified stock portfolios at 6–8% a year before inflation, bonds and balanced portfolios lower, and savings accounts at their current APY. Never plan on the best historical decade: run a cautious case (say 5%) and an optimistic one (8%) and make sure your plan still works at the cautious number.
Is compound interest taxed?
Interest in ordinary savings and CDs is taxed yearly as income. Investment gains inside taxable brokerage accounts are taxed when realized (and dividends yearly), while 401(k) and traditional IRA growth is tax-deferred and Roth IRA growth is tax-free on qualified withdrawal. The compounding math is the same; the after-tax outcome is not.
Sources
- Investor.gov (SEC) — Compound Interest Calculator — The SEC's investor-education tool uses the same compound growth formulas shown here.