Estimate with monthly compounding and contributions added at the end of each period. The interest rate is constant; real investment returns vary and can be negative. It doesn't account for inflation, taxes or fees. Not financial advice.
Fig. 1Compound interest Drag or use ← → Year 10 · $10,000 → $20,097
Initial deposit Simple interest Interest on interest $10,000 at 7% a year compounded monthly, with one stack every 5 years that stops growing when it reaches its year; each coin is $3,000. Simple interest adds the same amount every year ($700), but interest also earns interest: after 30 years the green part adds up to $50,165, more than the deposit and the simple interest combined ($31,000).
This compound interest calculator works out how your savings grow with compound interest and periodic contributions: final balance, amount contributed and interest earned, year by year.
What compound interest is
Compound interest is the mechanism by which your interest, in turn, generates more interest. Instead of being withdrawn, it’s reinvested and becomes part of the capital that keeps growing. Over the long run, this reinvestment makes a huge difference — it’s the force behind the so-called snowball effect.
The formula
Starting from an initial capital C, with periodic contributions A, a rate per period i and n periods, the final balance is:
Balance = C · (1 + i)n + A · [ (1 + i)n − 1 ] / i
This tool compounds monthly (monthly rate = annual interest ÷ 12) and adds the contribution at the end of each period.
For guidance only — this is an estimate with a constant interest rate. Real investment returns vary each year and can be negative, and it doesn’t account for inflation, taxes or fees. Not financial advice.
FAQ
What is compound interest?
It's the interest your money earns not just on your initial capital, but also on the interest already accumulated in previous periods. Because it's reinvested rather than withdrawn, growth accelerates over time — the so-called snowball effect.
How is compound interest calculated with contributions?
Each period, the balance grows by the interest rate and your contribution is added on top. This calculator compounds monthly: it applies the monthly rate (annual rate ÷ 12) to the balance and adds the contribution at the end of each period.
What annual interest rate should I use?
It depends on where you invest. As a historical reference, a diversified global equity portfolio has averaged around 6-8% a year over the long term, but real returns vary each year and can be negative. Use a conservative figure and try a few scenarios.
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