Compound Interest Calculator
Use this compound interest calculator to see how a starting amount and monthly contributions grow when returns are reinvested, and model your savings.
What it does
The Compound Interest Calculator shows how savings grow over time when returns are reinvested and earn returns of their own. It combines a starting amount with regular monthly contributions and compounds them at an annual rate.
Data sources & parameters
The figures below drive this calculator. We keep them aligned with the latest official guidance, and each result recalculates automatically whenever a value changes.
| Parameter | Value | Source | Last updated |
|---|---|---|---|
| Assumed annual return % | 7 | financekit.tools | — |
We always strive to use the latest data for every variable so our results and reports are as accurate as possible. Even so, errors are possible — you should not rely on this tool or its report alone, and we accept no liability for any decision made based on it.
The formula
FV = P × (1 + i)^n + PMT × ((1 + i)^n − 1) ÷ i, where i is the monthly rate and n the number of months
How it works
The starting balance grows at the annual rate, compounded monthly, while each monthly contribution is added and then compounds for the remaining months. The tool separates how much you put in from how much the compounding added.
Where it is used
- Planning long-term savings or an investment portfolio
- Seeing the effect of starting earlier or contributing more
- Comparing the power of different return rates over time
Worked example
Someone starts with $10,000.00 and adds $200.00 every month for 20 years at a 5% annual return. The balance grows to …, of which … is what they contributed and … is compound growth.
What the compound interest calculator does
Enter a starting amount, a monthly contribution, an expected annual return and the number of years you plan to save. The compound interest calculator projects the future value, your total contributions and the total interest earned, so you can see how a plan for retirement, a deposit or another long-term goal might grow when returns are reinvested.
How compound interest works
Simple interest is paid only on your original amount. Compound interest is paid on the starting balance plus all the growth already added, so each period's growth is calculated on a larger figure. In the early years the two look similar, because there is little accumulated growth. As the balance builds, compounding pulls further ahead, and its strongest years are the later ones.
What drives the result
The starting amount has the longest time to grow, so it does a large share of the work. Monthly contributions each start compounding as soon as they are added, which is why small regular deposits can outweigh a single large one. A higher annual return compounds faster but usually comes with more risk, so use a rate you can realistically expect to sustain.
Over short periods most of the balance is money you put in. Over long periods the interest earned can match or exceed your contributions, which is the clearest argument for starting early.
Why time matters more than size
The earliest contributions compound longest, so starting early usually matters more than starting big. Extending a plan by several years can produce a much larger balance than raising the monthly contribution, because the early deposits get extra years of growth. A few years' delay can cost far more than those years of contributions would suggest.
Using the results
The future value is a projection; real returns vary from year to year, and a steady average rate is a simplification. Use it to compare scenarios. Raise your monthly contribution by a small amount you could sustain and see the long-term effect. Run a cautious rate and an optimistic one; reality usually falls between them. Lengthen the term to see what patience adds.
Common mistakes
High returns happen in some years but are hard to sustain as a long-run average across a whole portfolio, so avoid an unrealistic rate. A nominal return overstates real growth; subtract expected inflation to see purchasing power in today's terms. Choose a contribution you can keep up, and revisit the projection as your circumstances change.
This article is general information only and is not financial advice.
About This Compound Interest Calculator
Use this compound interest calculator to get an instant, accurate estimate. The figures follow official guidance and every rate and threshold is kept up to date for 2026. Adjust the inputs above to match your situation, or browse all our calculators to plan your next step.
Frequently asked questions
How does the compound interest calculator work?
What is compound interest?
Does the annual return include inflation?
Why do small contributions matter so much?
Is my data kept private?
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