- With simple interest you would have $44,950.00. Compounding adds $2,576.55.
| Year | Total contributed | Total interest | Balance |
|---|---|---|---|
| 1 | $12,400.00 | $567.39 | $12,967.39 |
| 2 | $14,800.00 | $1,286.60 | $16,086.60 |
| 3 | $17,200.00 | $2,165.39 | $19,365.39 |
| 4 | $19,600.00 | $3,211.93 | $22,811.93 |
| 5 | $22,000.00 | $4,434.80 | $26,434.80 |
| 6 | $24,400.00 | $5,843.03 | $30,243.03 |
| 7 | $26,800.00 | $7,446.09 | $34,246.09 |
| 8 | $29,200.00 | $9,253.96 | $38,453.96 |
| 9 | $31,600.00 | $11,277.11 | $42,877.11 |
| 10 | $34,000.00 | $13,526.55 | $47,526.55 |
Results are estimates for reference only and may differ from the actual amount.
How to use
- Enter the amount you start with and how much you will add each month. Either can be zero.
- Enter the annual interest rate and the time period, and choose how often interest compounds.
- Choose whether contributions go in at the start or the end of each month.
- Read the final balance and how much of it is interest, then check the year-by-year table or download it as a CSV.
How compound growth works
When interest is compounded, it is added to your balance at regular intervals. From then on it earns interest itself. In the early years the effect is small, but it accelerates over time because each year’s interest is calculated on a bigger balance than the year before. This is why starting early matters more than contributing large amounts later.
Formulas used
For a single deposit: A = P × (1 + r/n)^(n×t).
With monthly contributions, the calculator works month by month: it adds the contribution, applies one month’s interest to the whole balance, and repeats. When compounding is annual or daily rather than monthly, the annual rate is first converted to the equivalent monthly rate, (1 + r/n)^(n/12) − 1, so that monthly contributions and the chosen compounding frequency fit together correctly.
Compared with simple interest
With simple interest, only the money you deposit earns interest; interest never earns interest. The calculator shows the simple-interest result for the same inputs so you can see what compounding adds. For $10,000 at 5% over 10 years, simple interest gives $15,000 while annual compounding gives $16,288.95, a difference of $1,288.95. Over 30 years the gap grows to about $18,200.
Example with contributions
Saving $100 a month at 6% compounded monthly, with each deposit made at the end of the month, grows to about $16,387.93 after 10 years. You contributed $12,000, so about $4,388 is interest. Keep going for 30 years and the balance passes $100,000, of which only $36,000 is your own money.
Keep in mind
The calculator assumes a constant rate. Savings account rates change, and investment returns vary from year to year, so use the result as a planning estimate. Taxes, account fees and inflation are not included and can reduce what you actually keep.
Frequently asked questions
- What is compound interest?
- Compound interest is interest earned on both your original money and the interest it has already earned. Each period's interest is added to the balance, so the next period earns interest on a larger amount.
- What is the compound interest formula?
- For a single deposit, A = P × (1 + r/n)^(n×t), where P is the principal, r the annual rate, n the number of compounding periods per year and t the number of years. $10,000 at 5% compounded annually for 10 years grows to $16,288.95.
- Does compounding frequency matter much?
- A little. At 5% for 10 years, $10,000 becomes $16,288.95 with annual compounding, $16,470.09 with monthly compounding and $16,486.65 with daily compounding. The rate and the time matter far more than the frequency.
- What is the difference between start-of-month and end-of-month contributions?
- A deposit made at the start of the month earns interest for that month, so the final balance is slightly higher. Most retirement and brokerage calculators assume end-of-month contributions.
- What is the rule of 72?
- Divide 72 by the annual rate to estimate how many years it takes to double your money. At 6% that is about 12 years; at 8%, about 9 years.
- Are taxes and inflation included?
- No. Interest may be taxable depending on the account, and inflation reduces what the final balance can buy. Treat the result as a nominal, pre-tax estimate.