Compound Interest Calculator
See how your savings grow with compound interest and regular monthly contributions, including an inflation-adjusted ‘real’ value and a year-by-year table.
- Total contributed
- $58,000.00
- Inflation-adjusted value
- $97,293.30
Year by year
| Year | Contributed | Balance |
|---|---|---|
| 1 | $12,400.00 | $13,201.42 |
| 2 | $14,800.00 | $16,634.27 |
| 3 | $17,200.00 | $20,315.28 |
| 4 | $19,600.00 | $24,262.39 |
| 5 | $22,000.00 | $28,494.83 |
| 6 | $24,400.00 | $33,033.24 |
| 7 | $26,800.00 | $37,899.74 |
| 8 | $29,200.00 | $43,118.03 |
| 9 | $31,600.00 | $48,713.55 |
| 10 | $34,000.00 | $54,713.58 |
| 11 | $36,400.00 | $61,147.34 |
| 12 | $38,800.00 | $68,046.20 |
| 13 | $41,200.00 | $75,443.79 |
| 14 | $43,600.00 | $83,376.14 |
| 15 | $46,000.00 | $91,881.93 |
| 16 | $48,400.00 | $101,002.60 |
| 17 | $50,800.00 | $110,782.60 |
| 18 | $53,200.00 | $121,269.60 |
| 19 | $55,600.00 | $132,514.70 |
| 20 | $58,000.00 | $144,572.72 |
What This Compound Interest Calculator Does
This compound interest calculator projects how a savings or investment balance grows over time when interest earns interest. You enter a starting amount, an optional monthly contribution, an annual interest rate, and a time horizon, and it returns the future value of your money along with the inflation-adjusted (real) value.
It is built for savers comparing accounts, investors estimating long-term portfolio growth, and anyone planning toward a goal such as a house deposit, an emergency fund, or retirement. Because it separates nominal growth from inflation, it shows both the headline number and what that money will actually buy.
How Compound Interest Works (The Formula)
Compounding means each period's interest is added to the principal, so future interest is calculated on a larger base. This tool uses monthly compounding. The two parts are added together.
Lump sum future value: FV = P x (1 + r/12)^(12 x t), where P is the starting principal, r is the annual rate as a decimal, and t is years.
Recurring monthly contributions: FV = PMT x [((1 + r/12)^(12 x t) - 1) / (r/12)], where PMT is the monthly deposit, assumed paid at the end of each month.
Inflation-adjusted real value: divide the nominal FV by (1 + i)^t, where i is the annual inflation rate. This restates the result in today's purchasing power.
Worked Example With Real Numbers
Suppose you start with P = $10,000, add PMT = $200 per month, earn r = 6% per year (0.06), over t = 10 years. The monthly rate is 0.06/12 = 0.005 and the number of periods is 120.
Lump sum: 10,000 x (1.005)^120 = 10,000 x 1.8194 = $18,194.
Contributions: 200 x [(1.8194 - 1) / 0.005] = 200 x 163.88 = $32,776.
Total nominal future value: 18,194 + 32,776 = about $50,970. You contributed $34,000 of your own money ($10,000 plus 120 x $200), so roughly $16,970 came from compounding.
Adjusted for 2.5% annual inflation: 50,970 / (1.025)^10 = 50,970 / 1.2801 = about $39,818 in today's dollars.
The Rule of 72: A Quick Mental Check
The rule of 72 estimates how long it takes money to double: divide 72 by the annual percentage rate. At 6%, 72 / 6 = 12 years to double a lump sum; at 8%, about 9 years.
It is an approximation that works best for rates between roughly 4% and 12%, and it ignores ongoing contributions. Use it to sanity-check the calculator's output, not to replace it.
Tips, Common Mistakes, and Factors That Matter
Small changes in the inputs compound into large differences over long horizons. Keep these points in mind:
- Compounding frequency matters: monthly compounding yields slightly more than annual at the same stated rate. Compare accounts using APY (which reflects compounding), not the nominal rate.
- Use a realistic rate. Savings accounts and stock-market averages differ widely; an over-optimistic rate inflates every later year disproportionately.
- Contribution timing changes the result. This calculator assumes end-of-month deposits; depositing at the start of each month earns one extra period of interest.
- Inflation erodes value. A 6% return with 2.5% inflation is closer to a 3.5% real gain, which is why the adjusted figure is shown.
- Don't ignore taxes and fees. Account fees, fund expense ratios, and tax on interest or gains reduce the effective rate this tool does not deduct.
- Time is the biggest lever. Starting earlier usually beats contributing more later, because additional years give compounding more periods to work.