Compound Interest Calculator
The quiet magic of compounding, in numbers: enter what you start with, what you add monthly, and watch the interest eventually out-earn you.
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Last reviewed: July 20, 2026 · Formulas verified by automated tests before every release.
How compounding works
Simple interest pays you on your deposit. Compound interest pays you on your deposit and on all the interest you've already earned — so the curve bends upward. In the early years the difference feels small; over decades it dominates. The honest takeaway: the biggest lever is not the rate you chase, it's how early you start and how consistently you contribute.
FV = P(1 + r)ⁿ + PMT × ((1 + r)ⁿ − 1) ÷ r · r = annual rate ÷ 12, n = months
An honest note on returns
Any projected rate is an assumption, not a promise. Markets fluctuate, and past averages don't guarantee future results — run the numbers with a conservative rate too, and treat the gap between the two as your planning margin. This is information, not investment advice.
🎮 60-second challenge: before trusting the formula, test your gut — guess when money doubles and meet the real curve. Most people lose by years.
Sources, assumptions and limitations
- Formula: FV = P(1+r/n)ⁿᵗ + PMT × (((1+r/n)ⁿᵗ − 1) ÷ (r/n)); contributions at period end
- Assumptions: Constant rate for the whole horizon; monthly compounding matches contribution frequency; no withdrawals.
- Not included: Taxes on gains, fees, inflation adjustment, variable returns — real investments fluctuate; a fixed rate is a planning simplification, not a promise.
- Last reviewed: July 22, 2026 by the CalcNotebook team
Frequently asked questions
What is compound interest?
Interest earned on both your original money and on previously earned interest. Each period the base grows, so growth accelerates — Einstein allegedly called it the eighth wonder of the world.
How is the future value calculated?
FV = P(1 + r)ⁿ for the starting amount, plus PMT × ((1 + r)ⁿ − 1) ÷ r for monthly contributions, where r is the monthly rate and n the number of months. This calculator compounds monthly.
What annual return should I assume?
Historically, broad stock index funds have averaged around 7–10% per year before inflation over long periods; savings accounts and bonds are lower. Use a conservative number for planning — the calculator shows any rate you choose.
Why do small monthly contributions matter so much?
Time does the heavy lifting. $200/month at 7% grows to about $104,000 in 20 years — of which only $48,000 is your money. Starting 10 years earlier roughly doubles the outcome even with the same total contributions.