How this compound interest calculator works
Compound interest is interest earned on top of interest. Each month your balance earns a little return, and next month that return earns its own return. Given enough time, this snowball effect does most of the heavy lifting — often contributing more than the money you actually deposited.
This tool assumes interest compounds monthly and that your contribution is added at the end of each month. The future value is:
FV = P(1 + r)n + C · [ ((1 + r)n − 1) ÷ r ]
where P = starting balance, C = monthly contribution, r = annual rate ÷ 12, and n = years × 12.
where P = starting balance, C = monthly contribution, r = annual rate ÷ 12, and n = years × 12.
The full derivation and assumptions are on our methodology page. Returns are not guaranteed — markets fluctuate, and this calculator is for education, not advice.
Frequently asked questions
- What is compound interest?
- Interest earned on both your original money and the interest it has already earned. That "interest on interest" makes balances grow faster the longer you stay invested.
- What rate of return should I use?
- For a diversified stock portfolio, many people model ~7% per year after inflation (about 10% before). Savings accounts and bonds are lower. Try a few rates to see the range.
- Does this calculator store my numbers?
- No. Everything runs in your browser. Nothing you type is uploaded or saved on a server.